Question

If the total amount of a loan, $24,000 is paid off in 3 years with an interest rate of 3.70%, compounded monthly, what was the principal rounded to the nearest cent? Provide only a numerical value for your answer (For example, if your amount came to $5,704.97, then you would type in 5704.97 as your answer).

Answer 1

21482.20

Explanation:

A = P(1+r/m)^mt

A = Total Amount, P = Principal, r = rate. m = number of months, t = time

24000 = P(1 + 0.037/12)^12*3

24000 = P(1.003083333)^36 --- I added 1 to 0.037 divied by 12, then multiplied 12*3 on the outside of the parentheses

24000 = 1.117204101(P)

24000/1,117204101 = 1.117204101P/1.1177204101

P = 21482.20

Good luck! :)