Question

Due in Stu Dent needs to pay tuition of $2290 for a special cooking class. The tuition is due in three months. He has money set aside but he's affraid that he might spend His brother offers to hold his money for him and will even give him simple interest on the money. If Stu's brother is going to give an interest of 5.91%, how much should Stu give his brother so that he has the tuition needed in three months. Round your answer to the nearest cent. Points possible: 1 This is attempt 1 of 4. Post this question to forum

Answer 1

1.

It is treated as 5.91% is the interest for the year and so interest for 3 months is 5.91/12*3	1.4775
So $ 2290 is required after 3 months and so the money required to give is = 2290/101.4775%	$ 2257

Please find the below calculation table

Year	Opening Principle amount	EMI	Interest Expenses	Amount towards Principle amount	Closing Principle amount
1	56000	8725	5040	3685	52315
2	52315	8725	4708	4017	48298
3	48298	8725	4347	4378	43920
4	43920	8725	3953	4772	39148
5	39148	8725	3523	5202	33946
6	33946	8725	3055	5670	28277
7	28277	8725	2545	6180	22096
8	22096	8725	1989	6736	15360
9	15360	8725	1382	7343	8017
10	8017	8725	722	8003	14

Note:-

Note :-	Calculation of EMI
	Annuity amount for Discount rate @9% for 10 year as per Annuity table is 6.418
	EMI = Loan amount /6.418
	=56000/6.418
	8725

2..a)53rd installment is in 5th year . So total interest for 5th year is 3523.. Interest per month is 3523/12= $294

b) Interest for 3 rd year is $4347