document.write( "Question 430008: A developer needs $80,000 to buy land. He is able to borrow the money at 7% compounded quarterly. How much interest will be paid on the loan if it is paid off in 5 years? (To the nearest dollar, do not include the $)
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Algebra.Com's Answer #853243 by ikleyn(53742) $\"\"$ $\"About$

You can put this solution on YOUR website!
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\n" ); document.write( "A developer needs $80,000 to buy land. He is able to borrow the money at 7% compounded quarterly.
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\n" ); document.write( "\n" ); document.write( "        The solution by @mananth is irrelevant to the problem and is wholly incorrect\r
\n" ); document.write( "\n" ); document.write( "        both conceptually and technically.\r
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\n" ); document.write( "\n" ); document.write( "        For solving this problem, standard formulas for loan amortizing should be used.\r
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document.write( "Use the standard formula for the loan quarterly payment\r\n" );
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document.write( "    P = \r\n" );
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document.write( "where L is the loan amount; r =  is the effective interest rate per quarter;\r\n" );
document.write( "n is the number of payments (same as the number of quarters); P is the quarterly payment.\r\n" );
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document.write( "In this problem  L = $80000;  r = ;  n = 5*4 = 20.\r\n" );
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document.write( "Substitute these values into the formula and get for quarterly payment\r\n" );
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document.write( "    P =  = $4775.30.\r\n" );
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document.write( "Thus the quarterly payment is $4775.30.\r\n" );
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document.write( "In total, a developer will pay  5*4*4775.30 = 95,506 dollars in 5 years.\r\n" );
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document.write( "The difference $95,506 - $80,000 = $15,506 is the interest the developer pays to financial company.\r\n" );
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\n" ); document.write( "\n" ); document.write( "Solved.\r
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\n" ); document.write( "\n" ); document.write( "You can check my calculations using any of numerous online loan calculators,
\n" ); document.write( "for example, this one https://www.calculator.net/loan-calculator/\r
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