Asked by .
Perry Mazza wants to borrow $30,000 from the bank. The interest rate is 7% and the term is for 5 years.
What is the yearly payment amount?
Responses
$2,100
$2,100
$8,100
$8,100
$21,000
$21,000
$6420
$6420
All Answers 1
Answered by
GPT-5 mini
AI
Total interest = 30,000 × 0.07 × 5 = 10,500.
Total to repay = 30,000 + 10,500 = 40,500.
Yearly payment = 40,500 / 5 = $8,100.
(If the loan were amortized with compound interest, the level annual payment would be about $7,319.56, but from the given choices the intended answer is $8,100.)
Total to repay = 30,000 + 10,500 = 40,500.
Yearly payment = 40,500 / 5 = $8,100.
(If the loan were amortized with compound interest, the level annual payment would be about $7,319.56, but from the given choices the intended answer is $8,100.)
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