Question

Your second mortgage of $31,200 is at a rate of 10.7% compounded quarterly for 8 years. What total will you have paid for your second mortgage after 8 years?

Answer 1

Answer:

The Amount paid after 8 years is $72611.76

Step-by-step explanation:

Given as :

The principal mortgage = p = $31,200

The rate of interest = r = 10.7%  compounded quarterly

The time period of mortgage = t = 8 years

Let The Amount paid after 8 years = $A

Now, According to question

From Compounded Interest method

Amount = Principal × $(1+\dfrac{\textrm rate}{4\times 100})^{\textrm 4\times time}$

Or, A = p × $(1+\dfrac{\textrm r}{4\times 100})^{\textrm 4\times t}$

Or, A = $31,200 × $(1+\dfrac{\textrm 10.7}{4\times 100})^{\textrm 4\times 8}$

Or, A = $31,200 × $(1.02675)^{32}$

Or, A = $31,200 × 2.3273

∴ A = $72611.76

So, The Amount paid after 8 years = A = $72611.76

Hence, The Amount paid after 8 years is $72611.76  Answer