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$3,500 Borrowed One Year Ago, Is to Be Settled by Payments

Question 95

Multiple Choice

$3,500 borrowed one year ago, is to be settled by payments of $500 today, $1,500 six months from now, and a final payment eighteen months from now. What is the amount of the final payment if the interest rate on the loan is 12% compounded monthly?


A) $3,625.31
B) $1,500.00
C) $7,005.78
D) $1,427.01
E) $2,429.16

Correct Answer:

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