Uncle Butch borrows $19,500 from the bank at 8 percent annually compounded interest to be repaid in 10 equal annual installments.The interest paid in the third year is ________.

Question

Quizplus · Accepted Answer

The interest paid in the third year is calculated on the remaining principal after the first two years of payments. The interest for the third year is 8% of the remaining principal at the end of the second year, which is $1,336.00.

Uncle Butch Borrows $19,500 from the Bank at 8 Percent