A loan of $10,000 has an annual interest rate of 8%, compounded quarterly. What will be the total due (principal + interest) if no payment is made for 12 months?
(A) $800
(B) $824
(C) $10,800
(D) $10,824
(E) $11,600
[spoiler]OA=D[/spoiler]
Source: Veritas Prep
A loan of $10,000 has an annual interest rate of 8%, compounded quarterly. What will be the total due (principal + inter
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Since, annual interest is \(8\%\) , interest per quarter is \(2\%\)
Number of payment periods = Number of quarters in 12 months = 4
Amount due = $$P\ \cdot\ \left(1.02\right)^4\ =\ 10000\ \cdot\ \left(1.0824\right)\ =\ 10824$$ D
Number of payment periods = Number of quarters in 12 months = 4
Amount due = $$P\ \cdot\ \left(1.02\right)^4\ =\ 10000\ \cdot\ \left(1.0824\right)\ =\ 10824$$ D
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