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17 August, 23:56

Pam Wedel borrowed $15,000 to pay for her child's education at Riverside Community College. Leslie must repay the loan

at the end of 9 months in one payment with 5% interest. How much interest must Leslie pay? What is the maturity value?

LU 16-1 (1)

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Answers (1)
  1. 18 August, 00:26
    0
    Interest rate is $562.5, Maturity value = $15,562.5

    Explanation:

    Pam borrowed $15000

    $15,000 is the principal amount ... p

    Nine months is the duration ... t

    Interest rate is a 5% which is per year interest rate ... r

    the interest for Pam will be P x rt

    =15000x 5% X 9/12

    =15000 x 0.05 x 0.75

    =562.5

    Interest rate is $562.5

    maturity value = principal plus interest

    =$15000 + $562.5

    =$15,562.5

    Maturity value = $15,562.5
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