document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1098480>Question 1098480</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A loan of $50,000 is paid off by paying 6% reducible interest. Annual repayments of $6,000 are paid at the end of the year.\r<BR>\n" );
document.write( "\n" );
document.write( "a. Determine the amount that is still owing at the end of the third year.<BR>\n" );
document.write( "b. How much interest is paid altogether?\r<BR>\n" );
document.write( "\n" );
document.write( "Thank you :) </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #712849 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=712849\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> the loan is 50,000.<BR>\n" );
document.write( "the interest rate is 6% per year on the remaining balance of the loan.<BR>\n" );
document.write( "the payment is at the end of each year.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "here's what happens.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "at the beginning of the first year, the remaining balance is 50,000\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "at the end of the first year ...<BR>\n" );
document.write( "interest is 50,000 * .06 = 3,000<BR>\n" );
document.write( "payment is 6,000<BR>\n" );
document.write( "remaining balance is 50,000 + 3,000 - 6,000 = 47,000\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "at the end of the second year ...<BR>\n" );
document.write( "interest is 47,000 * .06 = 2,820<BR>\n" );
document.write( "payment is 6,000<BR>\n" );
document.write( "remaining balance is 47,000 + 2,820 - 6,000 = 43,820\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "at the end of the third year ...<BR>\n" );
document.write( "interest is 43,820 * .06 = 2,629.2<BR>\n" );
document.write( "payment is 6,000<BR>\n" );
document.write( "remaining balance is 43,820 + 2,629.2 - 6,000 = 40,449.2\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "the total interest paid over the 3 year period is 3,000 + 2,820 + 2,629.2.<BR>\n" );
document.write( "this is equal to 8,449.2\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );