Asked by Jagmohan Aulakh on May 20, 2024
Verified
The total accrued interest owed as of August 31 on a loan advanced the preceding June 3 was $169.66. If the variable interest rate started at 8.75%, rose to 9% effective July 1, and increased another 0.5% effective July 31, what was the principal amount of the loan?
Variable Interest Rate
An interest rate that can fluctuate over time based on underlying benchmarks or indexes.
Accrued Interest
Interest that has been incurred but not yet paid, typically referring to the interest accumulating on a bond or loan between payment periods.
- Compute the base sum of a loan taking into account the accumulated interest and duration of the loan.
- Apprehend how variable interest rates affect the total amount of interest accrued.
Verified Answer
JH
Learning Objectives
- Compute the base sum of a loan taking into account the accumulated interest and duration of the loan.
- Apprehend how variable interest rates affect the total amount of interest accrued.