Answer:
The correct option is A: $39,695.48
Step-by-step explanation:
The formula to be used is :
PV = P(1 - (1 + r/t)^-nt) / (r/t)
P is the periodic payment.
Here, PV = $61,60
r = 0.0984
t = 6
n = 11 years
Putting values in the formula we get,
61600 = P(1 - (1 + 0.0984/6)^-(11 x 6)) / (0.0984 / 6)
61600 = P(1 - (1 + 0.0164)^-66) / 0.0164
61600*0.0164 = P(1 - (1.0164)^-66)
[tex]1010.24=P(1-0.341769)=0.658231*P[/tex]
[tex]P = \frac{1010.24}{0.658231}=1534.78[/tex]
So, Niki pays $1534.78 every two months for eleven years.
Now the total payment made by Niki = [tex]11*6*1534.78=101295.48[/tex]
Hence, interest paid is = [tex]101295.48-61600=39695.48[/tex]
So, the correct option is A: $39,695.48
