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DiKsa [7]
3 years ago
11

Horatio has taken out a $12,450 unsubsidized Stafford loan to pay for his four-year undergraduate education. The loan has an int

erest rate of 7.3%, compounded monthly, and a duration of ten years. Horatio will allow interest capitalization. Making monthly payments, how much interest will Horatio have paid in total by the time the loan is paid in full? Round all dollar values to the nearest cent.
Mathematics
2 answers:
Artyom0805 [142]3 years ago
6 0

The correct answer will be option A.

love history [14]3 years ago
3 0
I'll just give you an answer based on my understanding.
I'll use the formula for compounding interest.

A = P(1+r/n)^nt

A = future value of the loan including interest
P = principal of the loan
r = interest rate
n = number of times the interest is compounded per year (monthly=12)
t = number of years the money is loaned for

Given: 
P = 12,450
r = 7.3%, compounded monthly
t = 10 years

A = 12,450 (1+0.073/12)^12*10
A = 12,450 (1.006)¹²⁰
A = 12,450 (2.05)
A = 25,522.50

25,522.50 - 12,450 = 13,072.50 total interest paid.

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Steve invests 1,800 in an account that earns 3.7% annual interest, compounded continuously. What is the value of the account aft
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Answer: the value of the account after 10 years is $2606

Step-by-step explanation:

The formula for continuously compounded interest is

A = P x e (r x t)

Where

A represents the future value of the investment after t years.

P represents the present value or initial amount invested

r represents the interest rate

t represents the time in years for which the investment was made.

e is the mathematical constant approximated as 2.7183.

From the information given,

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