Question

This morning, you borrowed $12,700 at an APR of 6.9 percent. If you repay the loan in one lump sum four years from today, how much will you have to repay

Answer 1

Answer:

In Four years i will be paying $16,585.

Explanation:

In this question apply the time value of money techniques.The amount to be paid after 4 years is known as the Future Value and is determined by setting the parameters as follows:

Pv = $12,700

i = 6.9%

Pmnt = $0

N = 4

Fv = ?

Using a Financial Calculator, the Fv (Future Value) will be $16,585

Conclusion :

In Four years i will be paying $16,585.