14. United Sales Association (USA) recently borrowed $25,000 from its bank at a simple interest rate...
14. United Sales Association (USA) recently borrowed $25,000 from its bank at a simple interest rate of 11 percent. The loan is for one year, and the loan agreement calls for the interest to be added to the amount borrowed and the total amount to be repaid in monthly installments. (a) What are the loan’s monthly payments? (b) Compute the loan’s APR and, rEAR.
Homework Answers
ANSWER:
(a)
Simple interest=(Principal*Interest rate*Time period)
=($25000*11%*1)=$2750
Hence total amount payable=SI+Principal
=(25000+2750)=$27,750
Hence loan's monthly payments are =($27,750/12)
=$2312.5
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As HOMEWORKLIB RULES rule we answered (a) only. repost (b) question
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