Question

An individual borrowed $77,000 at an APR of 3%, which will be paid off with monthly payments of $462 for 18 years. Part 1 a. Identify the amount borrowed, the annual interest rate, the number of payments per year, the loan term, and the payment amount. The amount borrowed is $

Answer 1

The key components of the loan in question are: amount borrowed of $77,000, an annual interest rate (APR) of 3%, number of payments per year being 12 (monthly payments), a loan term of 18 years, and a monthly payment amount of $462.

Step-by-step explanation:

The student has been given a loan scenario and has to identify several key components of the loan:

• Amount borrowed: This is the principal amount of the loan, which in this scenario is $77,000.
• Annual interest rate: This is the percentage of the amount borrowed that will be charged as interest on an annual basis. Here, the annual interest rate (APR) is 3%.
• Number of payments per year: Given that the loan will be repaid with monthly payments, there are 12 payments per year.
• Loan term: This is the duration over which the loan will be repaid. The loan term is specified as 18 years.
• Payment amount: This is the amount that will be paid each month to repay the loan, which is $462 in this case.