The Size of the Monthly Repayment K That Amortizes a Loan

question 101

Multiple Choice

The size of the monthly repayment k that amortizes a loan of A dollars in N years at an interest rate of r per year, compounded monthly, on the unpaid balance is given by The value of r can be found by performing the iteration A family secured a loan of $360,000 from a bank to finance the purchase of a house. They have agreed to repay the loan in equal monthly installments of $2476 over 25 years. Find the interest rate on this loan. Round the rate to one decimal place.

• A)8.7%
• B)7.7%
• C)6.7%
• D)5.7%

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Psychosocial

Refers to the interrelation of social factors and individual thought and behavior.

Operant Learning Theory

A theory of learning that argues behavior is controlled by the consequences that follow it, emphasizing reinforcement and punishment.

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