Asked by Zaria Howard on May 09, 2024
Verified
Nancy borrowed $8,000 from her grandfather to buy a car when she started college. The interest rate being charged is only 4.5% compounded monthly. Nancy is to make the first $200 monthly payment on the loan three years after the date of the loan. How long after the date of the initial loan will she make the final payment?
Compounded Monthly
A method where interest earnings are calculated and added to the principal amount each month, allowing the interest to then earn interest in subsequent months.
- Gain insight into the mechanism of loan amortization and assess the length and dues for amortized borrowing.
- Invoke compound interest formulas for the determination of investments' future and present values.
Verified Answer
SB
Learning Objectives
- Gain insight into the mechanism of loan amortization and assess the length and dues for amortized borrowing.
- Invoke compound interest formulas for the determination of investments' future and present values.