<PRE><B>Question 1084256</B>
the remaining balance is 1,000,000.


the interest on the loan is 7.5% per year.


.075 * 1,000,000 = 75,000 a year.


3 * 75,000 = 225,000 interest payments total in 3 years.


the remaining balance on the loan remains the same since she did not do anything to reduce the principal.


the year by year analysis is:


beginning of year 1 she owes 1,000,000


end of year 1 she owes .075 * 1,000,000 = 1,075,000
she makes a payment of 75,000, so she owes 1,000,000


end of year 2 she owes .075 * 1,000,000 = 1,075,000
she makes a payment of 75,000, so she owes 1,000,000


end of year 3 she owes .075 * 1,000,000 = 1,075,000
she makes a payment of 75,000, so she owes 1,000,000


her total interest payment over the 3 years is 3 * 75,000 = 225,000.



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