3) How much interest will be paid in the 8th month if you borrow $20 000...

3) How much interest will be paid in the 8th month if you borrow $20 000 at a rate of 6% compounded monthly, and pay it off over 6 years? a) 237.30 b) 91.78 c) 339.69 d) 89.04

Solutions

Expert Solution

the interest paid in 8th month = $91.78

Given, loan Amant = $ 20.000 Term = 6 Years Rate = 6.2 compounded monthly. Equal Monthly Installment (EMI) = Loan Amount PVAF (6.62 Given, Loan Amount = $ 20,000 Term - 6 years Interest rate = 64. compounded monthly Equal Monthly Installment (EMI) - Loan Amount PVAF (8%D) where, PVAF (*).,D) = (1+r)n-1 *(1+y) where, Yo monthly rate = 6% 20.5% 12 n = Number of periods Gyears X12 = 72 periods Equal Montbly Installment (EMI) = $20,000 PVAF (0:50)_72) $20,000 (0.005)72_1 0.005 (1-005)42 -

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jeff jeffy answered 1 year ago

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