Question

Another bank is also offering favorable terms, so Rahul decides to take a loan of $22,000 from this bank. He signs the loan contract at 8% compounded daily for six months. Based on a 365-day year, what is the total amount that Rahul owes the bank at the end of the loan's term

Answer 1

Answer:

total amount that owes the bank at the end of the loan is $22897.74

Explanation:

given data

loan = $22,000

Annual rate = 8% = $\frac{8}{365}$ = 0.021192 %

time = 6 month = 183 days

solution

we get here Amount at the end of loan tenure

Amount at the end of loan tenure = Amount borrowed × FVf at 0.02192%

Amount at the end of loan tenure = $22,000  × 1.040886

Amount at the end of loan tenure = $22897.74  

so total amount that owes the bank at the end of the loan is $22897.74