Answer: $403.20
Explanation:We use a mortgage calculator to calculate the interest paid in the final payment. Since each repayment is made at the end of year, the repayments are annual payments. So, the calculator should have an annual amortization schedule to solve the problem.
I used
http://www.calculator.net/loan-calculator for the calculation because it has an annual payment schedule. Then, I went under the subtitle
Paying Back a Fixed Amount Periodically because the payments are equal. In that online calculator, I just input these data:
- Loan Amount: $12,000
- Loan Term: 4 (Loan term is number of years to pay the loan)
- Interest Rate: 11.5%
- Compound: Annually (APY)
- Pay Back: Every year
Then, I clicked the
calculate button and view amortization table. The annual amortization schedule is attached in this answer.
To determine the interest paid at the final payment, I looked at payment #4 because the final payment is at the 4th year. (The loan is paid in 4 annual payments).
As seen in the attached image, the interest paid in payment #4 is $403.20. Hence, the interest paid in the final payment is
$403.20.
Answer:
73 years
Explanation:
To solve this problem, we can use the formula for the annual compound interest, which is:

where:
A is the final amount after time t
P is the principal
r is the rate of interest
t is the time
In this problem, we have:
is the principal
is the interest rate (5.5%)
We want to find the time t at which the amount of money is
A = $100,000
Therefore, we can re-arrange the equation and solve for t:

So, it will take 73 years.
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