Question

Jerry’s loan had a principal of $22,000. He made quarterly payments of $640 for nine years until the loan was paid in full. How much did Jerry pay in interest? a. $3,120 b. $1,040 c. $2,010 d. $5,760.

Answer 1

The amount Jerry paid in interest is $1,040.

Given to us,

Jerry's principal amount = $ 22,000,

quarterly payment for each quarter = $ 640

Total time for which Jerry paid each quarter = 9 years

As We know that in a year there are 4 quarters,

so, $\rm 1\ year = 4\ quarters$,

$\rm 9\ year = 9\times 4\ quarters$,

9 years = 36 quarters,

The total amount paid by Jerry for nine years in each quarter =

quarterly payment for each quarter x no. of quarters for which amount paid

$\rm Total\ amount\ paid\ by\ Jerry\ for\ nine\ years\ in\ each\ quarter = \ 640\times 36 quarters = \ 23,040$

Thus, the total amount paid by Jerry for nine years in each quarter is $23,040.

Therefore,

$\rm Amount\ Jerry\ pay\ in\ interest = Amount\ Jerry\ paid- Principal\ amount$,

$\rm Amount\ Jerry\ pay\ in\ interest = \ 23,040-\ 22,000 = \ 1040$

Hence, the amount Jerry paid in interest is $1,040.

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