Question

Dillon took out a 2-year loan for $2375 at a sports-equipment store to be paid back with monthly payments at a 6.6% APR, compounded monthly. If the loan offers no payments for the first 5 months, how much will Dillon owe when he begins making payments?

A. $2709.15
B. $2441.03
C. $2375.00
D. $2536.58

Answer 1

B. 2441.03

Explanation:

A P E X

Answer 2

APR=6.6% compounded monthly.
After 5 months without payment,
he owes
F=P(1+i/12)^n [compound interest formula]
=2375(1+0.066/12)^5
=2441.03