Explanation Given: Loan amount, $8,000; four yearly payments; rate = 12 % . Calculation: Given that, the total loan amount is $8,000 which should be paid in four yearly payment at the rate of 12%. Thus, P = 8000 , t = 4 , r = 12 % = 0.12 The interest I is given by I = p r t . Substituting the known values, we get I = p r t = 8000 ⋅ 0.12 ⋅ 4 I = 3840 Thus, the amount to be repaid in three equal instalments is 8000 + 3840 = 11840 . Hence, each payment is $ 11840 4 = $ 2960 Where $2000 is being paid on the principal and $960 is interest. Therefore for the first year, the loan amount is $8000 and the interest paid is $960. Solving the equation I = p r t where p = 8000 , I = 960 , t = 1 Thus, the interest for the first year is I = 8000 ⋅ r ⋅ 1 = 8000 r Then at the end of the second year, $2960 is paid in which $2000 is for principal and $960 is for interest. So here the principal will be $6000. Thus, the interest for the second year is I = 6000 ⋅ r ⋅ 1 = 6000 r Then at the end of the third year, another payment of $2960 is paid in which $2000 is for principal and $960 is for interest

6th Edition

ISBN: 9780134434681

Author: Tom Pirnot

Publisher: PEARSON

See similar textbooks

Videos

Question

Chapter 8.6, Problem 2E

To determine

To find:

The APR of the loan amount $8,000.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 8.6, Problem 1E

Chapter 8.6, Problem 3E

Students have asked these similar questions

Refer to page 100 for problems on graph theory and linear algebra. Instructions: • Analyze the adjacency matrix of a given graph to find its eigenvalues and eigenvectors. • Interpret the eigenvalues in the context of graph properties like connectivity or clustering. Discuss applications of spectral graph theory in network analysis. Link: [https://drive.google.com/file/d/1wKSrun-GlxirS3IZ9qoHazb9tC440 AZF/view?usp=sharing]

Refer to page 110 for problems on optimization. Instructions: Given a loss function, analyze its critical points to identify minima and maxima. • Discuss the role of gradient descent in finding the optimal solution. . Compare convex and non-convex functions and their implications for optimization. Link: [https://drive.google.com/file/d/1wKSrun-GlxirS31Z9qo Hazb9tC440 AZF/view?usp=sharing]

Refer to page 140 for problems on infinite sets. Instructions: • Compare the cardinalities of given sets and classify them as finite, countable, or uncountable. • Prove or disprove the equivalence of two sets using bijections. • Discuss the implications of Cantor's theorem on real-world computation. Link: [https://drive.google.com/file/d/1wKSrun-GlxirS31Z9qoHazb9tC440 AZF/view?usp=sharing]

Chapter 8 Solutions

Mathematics All Around (6th Edition)

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, subject and related others by exploring similar questions and additional content below.

The APR of the loan amount $8,000.

Solution Summary: The author calculates the APR of the loan amount of 8,000 which should be paid in four yearly payments at the rate of 12%.

Videos

To find: The APR of the loan amount $8,000.

Want to see the full answer?

Chapter 8 Solutions

To find:

The APR of the loan amount $8,000.