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10 May, 16:35

Jim borrowed $12,500 at 6% per annum compound interest. At the end of the first year, he repaid $5,500.

calculate the interest on the loan for the first year

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  1. 10 May, 20:31
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    The amount of repayment AT THE END of the first year does not reduce the interest on the loan for the first year.

    The interest of 6% per annum compounded monthly

    = 12500*[ (1 + (0.06/12)) ^12-1]

    = 770.97 (to the nearest cent)
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