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

Question

Matteo Pope

26 June, 16:41

+2

Answers (1)

Know the Answer?

Timothy Duran · Answer 1

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

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. $2709.15B. $2441.03C. $2375.00D. $2536.58