Jack borrows $7,000.00 at an interest rate of 15% compounded monthly to be paid off monthly payment of $180.00 If the length of the loan is 54 months, What is the total amount that would be needed to pay off the entire loan balance at the end of 6 months? $7,089.05 $9,752.75 $8,059.25 $6,467.70

Jack borrows $7,000.00 at an interest rate of 15% compounded monthly to be paid off monthly payment of $180.00 If the length of the loan is 54 months, What is the total amount that would be needed to pay off the entire loan balance at the end of 6 months? $7,089.05 $9,752.75 $8,059.25 $6,467.70

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

100%

Jack borrows $7,000.00 at an interest rate of 15% compounded monthly to be paid
off monthly payment of $180.00 If the length of the loan is 54 months, What is the
total amount that would be needed to pay off the entire loan balance at the end of 6
months?
$7,089.05
$9,752.75
$8,059.25
$6,467.70

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