Assume you have secured a loan of $10,000 from a bank which will be paid in one year. The fin bank has offered you $850 monthly installments, which equates to a 3.67% annualized interest rate. The monthly interest rate of 0.31% is the annual rate divided by 12. You know that the interest is paid at the end of the period, so you can multiply the opening balance by the monthly interest rate to get the interest paid. What is the opening balance for the month of June?
Assume you have secured a loan of $10,000 from a bank which will be paid in one year. The fin bank has offered you $850 monthly installments, which equates to a 3.67% annualized interest rate. The monthly interest rate of 0.31% is the annual rate divided by 12. You know that the interest is paid at the end of the period, so you can multiply the opening balance by the monthly interest rate to get the interest paid. What is the opening balance for the month of June?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Assume you have secured a loan of $10,000 from a bank which will be paid in one year. The fin bank has offered you $850 monthly installments, which equates to a 3.67% annualized interest rate.
The monthly interest rate of 0.31% is the annual rate divided by 12. You know that the interest is paid at the end of the period, so you can multiply the opening balance by the monthly interest rate to get the interest paid.
What is the opening balance for the month of June?
| Month | Payment | Interest | Principal | Opening Balance | Closing Balance | |
| January | $850.00 | $10,000.00 | ||||
| February | $850.00 | |||||
| March | $850.00 | |||||
| April | $850.00 | |||||
| May | $850.00 | |||||
| June | $850.00 | |||||
| July | $850.00 | |||||
| August | $850.00 | |||||
| September | $850.00 | |||||
| October | $850.00 | |||||
| November | $850.00 | |||||
| December | $850.00 | |||||
| Monthly Rate | 0.31% | |||||
| Annual Rate | 3.67% | |||||
| Total Interest Paid |
CHOICES:
A.5,045.75
B. No choice given
C. 6,002.10
D. 5,877.77
E. 4,980.40
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