Question

Niki makes the same payment every two months to pay off his $61,600 loan. The loan has an interest rate of 9.84%, compounded every two months. If Niki pays off his loan after exactly eleven years, how much interest will he have paid in total? Round all dollar values to the nearest cent.

Answer 1

After a series of calculations, I found out that the interest he has to pay in total would be $117,484.77.

You might use my answer in reviewing by using your solution also.

I hope my answer has come to your help. God bless and have a nice day ahead!

Answer 2

Answer:

$39,695.48

Step-by-step explanation:

Here, the present value of the annuity is given.

Here, PV = $61,600

P is the periodic payment.

r = 9.84% or 0.0984

t = number of payments in a year = 6

n = 11 years

$61600= P(1-(1+0.0984/6)^{-(11\times6)})/ (0.0984/6)$

=> $61600\times0.0164 =P(1 - (1.0164)^{-66})$

=>$P =1010.24/0.658231$

= 1534.78

So, Niki is paying $1,534.78 at every two months interval for eleven years.

Hence, total payment made by Niki will be = $11\times6\times1534.78$ = $101295.48

So, interest paid = $101295.48-61600$ = $39,695.48