Answer:
Each year the entrepreneur will pay $ 540,000/10= $ 54,000.
Explanation:
Principal = P = $ 300,000
Rate = R= 8 %
Time = T= 10 years
Simple Interest = SI= P * R * T/100
SI= $ 300,000 * 8 * 10/100
SI= $ 240,000
Over the next ten years the total interest will be $ 240,000
Each year it will be $ 240,000/ 10= $ 24,000
Total Amount to be paid in the next ten years would be = A = Simple Interest + Principal = SI + P = $ 240,000 + $ 300,000= $ 540,000
Each year the entrepreneur will pay $ 540,000/10= $ 54,000
Answer:
The Entrepreneur will have to pay $3,639.83 each year.
Explanation:
The formula for amount of payment per year is given as
= a/{[(1+r)ⁿ]-1}/[r(1+r)ⁿ]
Where a = amount of the loan
r = interest rate
n = number of monthly payments
a: $300,000, the amount of the loan
Annual rate is 8%
Therefore interest rate which is r is calculated as
r: (8% annual rate is expressed as 0.08
We then divide 0.08 by 12 monthly payments per year)
0.08 ÷12
0.0067
n: (12 monthly payments per year times 10 years)
This is calculated as 12 × 10= 120
The amount to be paid per year is calculated as:
a/{[(1+r)ⁿ]-1}/[r(1+r)ⁿ]
300,000/{[(1+0.0067) ¹²⁰]-1}/[0.0067(1+0.0067)¹²⁰]
= $3,639.83
Hence, the Entrepreneur will have to pay $3,639.83 each year.
