A person borrowed some money and agreed to pay off the loan by making monthly payments of $75 for three years; the first payment is in one month. The interest rate on the loan is 9%. Find the amount that the person borrowed.
A person borrowed some money and agreed to pay off the loan by making monthly payments of $75 for three years; the first payment is in one month. The interest rate on the loan is 9%. Find the amount that the person borrowed.
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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Question
A person borrowed some money and agreed to pay off the loan by making monthly payments of $75 for three years; the first payment is in one month. The interest rate on the loan is 9%. Find the amount that the person borrowed.
Expert Solution
Step 1
Given:
Monthly payment =$75
Interest rate = 9%
Years = 3
Compounding is in years.
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