Question

Suppose you take out a margin loan for $70,000. The rate you pay is an effective rate of 8.8 percent. If you repay the loan in six months, how much interest will you pay

Answer 1

Answer:The interest you will pay on the margin loan can be calculated using the formula:

Interest = Principal x Rate x Time

Where:

- Principal = $70,000

- Rate = 8.8% per year, or 0.088 per year in decimal form

- Time = 6 months, or 0.5 years in decimal form

Plugging these values into the formula, we get:

Interest = $70,000 x 0.088 x 0.5 = $3,080

Therefore, you will pay $3,080 in interest on the margin loan if you repay it in six months.

Step-by-step explanation: