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 closing balance for the month of November? 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             Group of answer choices a. $847.31 b. $2,534.38 c. $5,045.10 d. No choice given e. $1,692.13

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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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 closing balance for the month of November?

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          

 

Group of answer choices
a. $847.31
b. $2,534.38
c. $5,045.10
d. No choice given
e. $1,692.13
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