Isaac borrowed $3,000 at 10.5% compounded quarterly 3½ years ago. One year ago he made a payment of $1,200. What amount will extinguish the loan today?

Compounded Quarterly

A method of calculating interest where the interest is added to the principal balance four times a year.

Extinguish

To put an end to something, such as a debt or obligation, by payment or other settlement.

Payment

The act of transferring money or other valuable items in exchange for goods, services, or to fulfill a contractual obligation.

Become proficient in the concept of compound interest and how to compute it for different compounding periods.
Assess the forthcoming value of investments with assorted rates, periods, and compounding sequences.

Verified Answer

Final Answer :

$2,980.82

Learning Objectives

Become proficient in the concept of compound interest and how to compute it for different compounding periods.
Assess the forthcoming value of investments with assorted rates, periods, and compounding sequences.