Sam really wanted to buy a car, but did not have the money at the moment. He was talking to the salesman and they said that he could get him a loan for the car for $30,000 on a 11.41% per year interest rate compounded continuously. He wanted to spend his money on other things so he held off on paying down the balance of the loan for a while.
1. What was the loan balance 3 months in?
2. Sam has a take home pay of $40,000 a year. What percentage of his take home pay is the interest on the loan in his first year?
1 answer