Question

Your second mortgage of $31,200 is at a rate of 10.7% compounded quarterly for 8 years. What total will you have paid for your second mortgage after 8 years?

Answer 1

The Amount paid after 8 years is $72611.76

Explanation:

Given as :

The principal mortgage = p = $31,200

The rate of interest = r = 10.7% compounded quarterly

The time period of mortgage = t = 8 years

Let The Amount paid after 8 years = $A

Now, According to question

From Compounded Interest method

Amount = Principal ×
`(1+(\textrm rate)/(4* 100))^(\textrm 4* time)`

Or, A = p ×
`(1+(\textrm r)/(4* 100))^(\textrm 4* t)`

Or, A = $31,200 ×
`(1+(\textrm 10.7)/(4* 100))^(\textrm 4* 8)`

Or, A = $31,200 ×
`(1.02675)^(32)`

Or, A = $31,200 × 2.3273

∴ A = $72611.76

So, The Amount paid after 8 years = A = $72611.76

Hence, The Amount paid after 8 years is $72611.76 Answer