Question

Trudy borrowed $560.00 from a friend and agreed that for several years she would make equal monthly payments to pay only the interest on the loan. If her 12 interest payments each year total 6.5% of the amount she borrowed, how much interest has she paid after 18 monthly payments?

Answer 1

Answer:

$54.6

Step-by-step explanation:

Amount borrowed = $560

Interest paid in the 12-month period = 6.5% of 560 =$36.4

The amount of interest Trudy pays in 18 months is worked out as

Monthly interest = $36.4/12

Interest payable in 18 months

= ($36.4/12) x 18

= $54.6