Alex and Beatrice each borrow $10,000 at an annual effective interest rate of 8%.

Alex and Beatrice each borrow $10,000 at an annual effective interest rate of 8%. Alex makes a payment of $1,000 at the end of each year, and Beatrice makes a payment of $500 at the end of each half year. Both borrowers will pay a final, smaller payment at the end of the loan (a "drop payment"). Determine the total amount of interest paid by the two borrowers.

Solutions

Expert Solution

Alex - Total interest = $10,915.42

Beatrice - Total Interest = $ 10,518.04

Total interest by both = $21,433.46

jeff jeffy answered 2 years ago

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