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The Interest Rate on a $100,000 Loan Is 7

Question 12

Short Answer

The interest rate on a $100,000 loan is 7.5% compounded quarterly.
a) What quarterly payments will reduce the balance to $75,000 after five years?
b) If the same payments continue, what will be the balance 10 years after the date that the loan was received?

Correct Answer:

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a) $2,916....

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