Question

Sophie received a $32,750 loan from a bank that was charging interest at 4.50% compounded semi-annually.

a. How much does she need to pay at the end of every 6 months to settle the loan in 4 years?

Round to the nearest cent

b. What was the amount of interest charged on the loan over the 4-year period?

Round to the nearest cent

Answer 1

Know tempound interest formula is, d nt A = Pr (its where pe A future amount Poinita cipal amount date of interest n - No. of times intereset applied time period. t- Here, Sean P= $32750 = 4.5% = o= 4.5.7 = 0.045, t = 4 years compounded semi-ammua annually means no 2. su, (2x4 A = 32750 (1+0045) 32750 (1 +0.0225) = 32750 (1.0225) = 32750 (1.194831) 8 39130.71996 894 A E 39130.72 years as since She is paying Hetere senmi-gantu prually after every 6 months toe for u so, so she will pay 2x 4=8 times So, she need to pay 39.130.72 = 4891.3399 8 E 4891.34 ie shee need to pay $ 4891.34 a presyo at the end OHP every 6 months.

bs Now, Here, A = $ 39130.72 and p = $32750 So, Interest charged is given by I = A-P I 391 30.72 32750 =) 1 = 6380. 72 charged over loan for 4 years so, the total interest is $6380.72