A home improvement loan is to be repaid by equal monthly payments for six years. The interest rate is 5.4% compounded monthly and the amount borrowed is $33,500. How much interest will the borrower pay over the six years?

Question

Quizplus · Accepted Answer

The correct answer is A. The total interest paid over the six years is $5,794. This can be calculated using the formula: Total interest = (Amount borrowed * (Interest rate / 12) * (Number of months)) - Amount borrowed. In this case, the amount borrowed is $33,500, the interest rate is 5.4% compounded monthly, and the number of months is 6 * 12 = 72. Plugging these values into the formula, we get: Total interest = (33500 * (0.054 / 12) * 72) - 33500 = $5,794.

A Home Improvement Loan Is to Be Repaid by Equal