document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1118666>Question 1118666</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Larry borrows $12000 to be repaid at 12% p.a.  at rate of interest over 4 years.<BR>\n" );
document.write( "a. Calculate the interest that Larry must pay.<BR>\n" );
document.write( "b. What is the total amount that Larry must repay?<BR>\n" );
document.write( "c. If Larry repays the loan in equal annual instalments, calculate the amount of each repayment.\r<BR>\n" );
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document.write( "But could you just answer question c please. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #734042 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=734042\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> you did not specify the type of loan.\r<BR>\n" );
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document.write( "is it flat rate or is it compound rate from the remaining balance?\r<BR>\n" );
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document.write( "if flat rate, the formula would be:\r<BR>\n" );
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document.write( "i = p * r * n\r<BR>\n" );
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document.write( "i is the interest<BR>\n" );
document.write( "p is the principal<BR>\n" );
document.write( "r is the interest rate per time period<BR>\n" );
document.write( "n is the number of time periods\r<BR>\n" );
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document.write( "in your problem, the formula becomes:\r<BR>\n" );
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document.write( "i = 12000 * .12 * 4\r<BR>\n" );
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document.write( "this results in i = 5760.\r<BR>\n" );
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document.write( "that would be the total interest that would be paid after 4 years.\r<BR>\n" );
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document.write( "the total amount that would have to be repaid is the principal plus the interest.\r<BR>\n" );
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document.write( "that would be 12000 + 5760 = 17760.\r<BR>\n" );
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document.write( "he would more then likely pay this in equal installments of 17760 / 4 = 4440 per year.\r<BR>\n" );
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document.write( "if the loan type is compound interest on the remaining balance, then a different calculation is required.\r<BR>\n" );
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document.write( "while there are formulas to allow you to calculate this manually, it is best solved by using a financial calculator.\r<BR>\n" );
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document.write( "one such calculator can be found at <a  rel=nofollow HREF= \"https://arachnoid.com/finance/\" target = \"_blank\">https://arachnoid.com/finance/</a>\r<BR>\n" );
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document.write( "you would need to find the annual payments required before determining what the total interest is to be repaid.\r<BR>\n" );
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document.write( "here are what the inputs look like for that calculation.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/061501.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "here is what the output looks like.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2018/061502.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "the total interest paid would be 4 * 3950.81 minus 12000 = 3803.52.\r<BR>\n" );
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document.write( "that's the payment amount times the number of payments minus the initial loan amount.\r<BR>\n" );
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document.write( "in the flat rate loan, the interest is calculated off the original amount of the loan.\r<BR>\n" );
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document.write( "in the remaining balance loan, the interest is calculated from the remaining balance at the end of each time period.\r<BR>\n" );
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document.write( "for the same interest rate, you will pay less overall interest with the remaining balance type loan.\r<BR>\n" );
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document.write( "not knowing what type of loan you are talking about, i calculated for what type i know they usually are.\r<BR>\n" );
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document.write( "to summarize.\r<BR>\n" );
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document.write( "with flat rate type loan:\r<BR>\n" );
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document.write( "a. Calculate the interest that Larry must pay.<BR>\n" );
document.write( "interest = 5760.<BR>\n" );
document.write( "b. What is the total amount that Larry must repay?<BR>\n" );
document.write( "total amount to be be repaid is 17760.<BR>\n" );
document.write( "c. If Larry repays the loan in equal annual installments, calculate the amount of each repayment. <BR>\n" );
document.write( "amount of each payment would be 4440.\r<BR>\n" );
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document.write( "with compound interest remaining balance type loan:\r<BR>\n" );
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document.write( "a. Calculate the interest that Larry must pay.<BR>\n" );
document.write( "interest = 3803.25.<BR>\n" );
document.write( "b. What is the total amount that Larry must repay?<BR>\n" );
document.write( "total amount to be repaid is 15803.25.<BR>\n" );
document.write( "c. If Larry repays the loan in equal annual instalments, calculate the amount of each repayment.<BR>\n" );
document.write( "amount of each payment would be 3950.81.\r<BR>\n" );
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document.write( "note that in the compound interest remaining balance type loan, you need to calculate the payment required before you can calculate the total interest to be paid.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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