Suppose you borrowed $15.000 at a rate of 11.1% and must repay it in 5 equal installments at the end of each of the next 5 years. How much interest would you have to pay in the first year? a. $1,248.75 O b. $1,665.00 OC. $1,714.95 O d. $1,481.85 O e. $1,615.05

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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**Loan Interest Calculation Problem**

Suppose you borrowed $15,000 at a rate of 11.1% and must repay it in 5 equal installments at the end of each of the next 5 years. How much interest would you have to pay in the first year?

- a. $1,248.75
- b. $1,665.00
- c. $1,714.95
- d. $1,481.85
- e. $1,615.05

To solve this, calculate the interest for the first year based on the principal amount.
Transcribed Image Text:**Loan Interest Calculation Problem** Suppose you borrowed $15,000 at a rate of 11.1% and must repay it in 5 equal installments at the end of each of the next 5 years. How much interest would you have to pay in the first year? - a. $1,248.75 - b. $1,665.00 - c. $1,714.95 - d. $1,481.85 - e. $1,615.05 To solve this, calculate the interest for the first year based on the principal amount.
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