Question

Myra took out a 20-year loan for $80,000 at an APR of 11.5%, compounded
monthly. Approximately what would be the total cost of her loan if she paid it
off 13 years early?

Answer 1

Answer:

answer choices are

Step-by-step explanation:

a 140,581.40

b 71,663.76

c 68,917.64

d 204,753.60

on a.p.e.x these are the answer choices im doing it rn and its a test and i cant find answers anywhere

Answer 2

Myra took out a 20-year loan for $80,000 at an APR of 11.5%, compounded monthly. The total cost of her loan if she paid it

13 years early would be 178251.20.

How does compounding work?

Suppose that the initial amount of something is P.

Let after one unit of time, it increases by R% (per unit time) and compounds on the resultant total of those quantities, then, after T such units of time, then the quantity would increase to:

$A = P(1 + \dfrac{R}{100})^t$

Myra took out a 20-year loan for $80,000 at an APR of 11.5%, compounded monthly.

The principal amount which is 80,000

Time which is 20 year

The rate which is 11.5%

And since, we have to find 13 years early so, the time would be:

20-13 = 7 years.

And since, we have to find for 12 months

Hence, n=12

We have the formula to calculate compound interest:

$A = P(1 + \dfrac{R}{100})^T$

$A = 80000(1 + \dfrac{0.115}{100})^{12.7}\\\\A = 178251.20$

Learn more about  interest here;

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