Miss Jones borrowed $10,000 at 12% compounded monthly, and agreed to pay back the loan by equal monthly payments over five years. After making the first 10 payments on time, she missed the next four payments.
-What total amount paid on the scheduled date for the 15^th payment will bring the loan up-to-date?

Question

Quizplus · Accepted Answer

To bring the loan up-to-date after missing four payments, Miss Jones needs to cover the missed payments plus any accrued interest. The correct calculation involves determining the monthly payment for a $10,000 loan at 12% annual interest compounded monthly over 5 years, then calculating the total amount due including missed payments, accrued interest, and the current month's payment. The correct total aligns with option C, $1,134.67, which accounts for the compounded interest and the structure of the loan repayment.

Miss Jones Borrowed $10,000 at 12% Compounded Monthly, and Agreed