Asked by Sofia Mateeva on May 11, 2024
Verified
Sam borrowed $10,000 at prime + 2% on March 29. He agreed to payments of $2,000 on the first day of each month beginning May 1. The prime rate was 4% when Sam took out the loan. Construct a full repayment schedule showing details of the allocation of each payment to interest and principal. What is the final payment?
Prime Rate
The interest rate that commercial banks charge their most creditworthy customers, usually large corporations.
Repayment Schedule
A detailed plan of the amounts and timing of payments to be made on a loan.
Loan
An amount of money lent out that is to be returned with a specified interest.
- Evaluate and create repayment plans for loans that integrate principal amounts with interest charges.
Verified Answer
VW
Learning Objectives
- Evaluate and create repayment plans for loans that integrate principal amounts with interest charges.