An amount of 18000 is borrowed for 11 years at 425 interest

An amount of $18,000 is borrowed for 11 years at 4.25% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be paid back? Round your answer to the nearest dollar.

Solution

We first calculate the monthly payment

PMT (0.0425/12,12*11,18000,0,0)

= $170.95

Total payment must be paid back = $170.95*12*11+18000 = $4565.43

So, answer is $4565.43