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17 July, 21:55

Dillon took out a 2-year loan for $2375 at a sports-equipment store to be paid back with monthly payments at a 6.6% APR, compounded monthly. If the loan offers no payments for the first 5 months, how much will Dillon owe when he begins making payments?

A. $2709.15

B. $2441.03

C. $2375.00

D. $2536.58

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  1. 17 July, 22:17
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    APR=6.6% compounded monthly.

    After 5 months without payment,

    he owes

    F=P (1+i/12) ^n [compound interest formula]

    =2375 (1+0.066/12) ^5

    =2441.03
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