A small business borrows $46,000 for expansion at 7% compounded monthly. The loan is due in 6 years. How much interest will the business pay? The business will pay $ in interest. (Round to the nearest cent.)

A small business borrows $46,000 for expansion at 7% compounded monthly. The loan is due in 6 years. How much interest will the business pay? The business will pay $ in interest. (Round to the nearest cent.)

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 31P

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

A small business borrows $46,000 for expansion at 7% compounded monthly. The loan is due in 6 years. How much
interest will the business pay?
The business will pay $ in interest.
(Round to the nearest cent.)

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