A loan of $A is repaid over 10 years with quarterly payments at j₄ = 10%.The principal portion of the 12^th payment is $300.52.What is A? (Answer to the nearest dollar)

Question

Quizplus · Accepted Answer

The principal portion of the 12th payment is $300.52. This means that the total amount of principal repaid over the 10 years is $300.52 * 12 = $3,606.24. The total amount of interest paid over the 10 years is $A * j₄ * 10 = $A * 0.10 * 10 = $A. Therefore, the total amount of money repaid over the 10 years is $3,606.24 + $A = $A + $3,606.24. Since the loan was repaid over 10 years with quarterly payments, the total number of payments made is 10 * 4 = 40. Therefore, the total amount of money repaid over the 10 years is also $A * 40. Therefore, we have the equation $A + $3,606.24 = $A * 40. Solving for A, we get A = $3,606.24 / (40 - 1) = $3,606.24 / 39 = $92.47. Rounding to the nearest dollar, we get A = $93.

A Loan of $A Is Repaid Over 10 Years with Quarterly