Asked by Youry Wylie on Jul 02, 2024
Verified
Winchell Plastics plans to buy a new delivery truck. The company can borrow $16,000 for 15 months at 15% compounded monthly. If Winchell borrows the money at this rate, how much will it have to pay in interest? (Use Tables 16-1A&B or a calculator.)
Compounded Monthly
Interest calculation method where the accrued interest is added to the principal sum each month, leading to interest on interest.
Interest Charge
A fee charged by a lender to a borrower for the use of borrowed money, often expressed as an annual percentage of the principal.
- Acquire the skill to calculate interest charges on loans.
- Acquire the ability to utilize financial tables and calculators for the calculation of future values and compound interest.
- Acquire knowledge on how varied compounding intervals influence the future value and compound interest.
Verified Answer
AS
Amber Scarborough7 days ago
Final Answer :
0.15 ¸ 12 = 0.0125; 15 months; $16,000 ´ 1.20483 = $19,277.28;
$19,277.28 - $16,000 = $3,277.28 interest
$19,277.28 - $16,000 = $3,277.28 interest
Learning Objectives
- Acquire the skill to calculate interest charges on loans.
- Acquire the ability to utilize financial tables and calculators for the calculation of future values and compound interest.
- Acquire knowledge on how varied compounding intervals influence the future value and compound interest.
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