For the situation described, determine the amount of the loan's discount, the net amount of money you receive, and the loan's actual interest rate, to the nearest tenth of a percent.

Question

For the situation described, determine the amount of the loan's discount, the net amount of money you receive, and the loan's actual interest rate, to the nearest tenth of a percent.

You borrow $10,000 on a 8% discounted loan for a period of 5 years.

Answer 1

A=10000(1.08)^5

10000=P(1.08)^5= 14693.28077P

P= 100000/14693.28077 = $680.58