Answered: Roberto borrows $7000. The loan is to…

Roberto borrows $7000. The loan is to be repaid in 10 yr at 11% interest compounded annually. How much will be repaid at the end of 10 yr?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 7CE

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

Solve. Use a calculator as needed for evaluating formulas.
At the end of 10 yr. Roberto will pay
Roberto borrows $7000. The loan is to be repaid in 10 yr at 11% interest,
compounded annually. How much will be repaid at the end of 10 yr?
(Round to the nearest cent.)

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