Question

Jeffries & Sons is borrowing $95,000 for four years at an APR of 7.05 percent. The principal is to be repaid in equal annual payments over the life of the loan with interest paid annually. Payments will be made at the end of each year. What is the total payment due for Year 3 of this loan?A) $28,224.90B) $27,098.75C) $25,424.38D) $30,447.50E) $28,773.13

Answer 1

Answer:

correct option is B) $27,098.75

Explanation:

given data

borrowing =  $95,000

APR = 7.05 percent

to find out

total payment due for Year 3

solution

we will apply here formula for total payment due for Year 3  that is express as

total payment due for Year 3   = $\frac{principal}{4} + \frac{principal}{4*2*rate}$     .............1

put here value

total payment due for Year 3   = $\frac{95000}{4} + \frac{95000}{4*2*0.0705}$  

total payment due for Year 3   = $27098.75

so correct option is B) $27,098.75