A $13,000 loan is to be amortized by equal monthly payments for five years. The interest rate is 12% compounded monthly.
-How much interest will the debtor pay in total over the five-year period?

Question

Quizplus · Accepted Answer

To find the total interest paid, first calculate the monthly payment using the formula for an amortizing loan. Then, multiply the monthly payment by the total number of payments (60) and subtract the principal ($13,000) from this total to find the interest paid. The correct total interest paid is $4350.80.

A $13,000 Loan Is to Be Amortized by Equal Monthly