Question

To finance the remodeling of her kitchen, Rosa borrowed $26400 on an 18-month home equity loan. She signed a promissory note bearing interest at 12 and 1/2%. What total amount did Rosa pay in the due date?

Answer 1

28875

Step-by-step explanation:

Rosa borrowed $26400 for remodeling of her kitchen on home equity loan.

Promissory note bearing interest of 12 and 1/2% or 12.5% or 0.125.

Total amount Roma has to pay in the due which means the end of 18 months.

• 1st Principal amount is $26400 = P

• 2nd Rate of interest is 12 and 1/5 %. = R

• 3rd Time days/month/week taken to pay the total amount. =T

• P= $26400 , R = 12.5 % and time is 18 months

Adjustments:-

• R = .125 T = 18/24 (calculated on a monthly basis, 1 year has 12 months)

• PRT = Interest on a due date

• I = 26400 * .125 * 0.75 = 2475

• 2475 interest charged for 18 months

• Total amount Roma has to pay in the due date ?

• 26400 + 2475 = 28875