$3,500 borrowed one year ago, is to be settled by payments of $500 today, $1,500 six months from now, and a final payment eighteen months from now. What is the amount of the final payment if the interest rate on the loan is 12% compounded monthly?

A) $3,625.31
B) $1,500.00
C) $7,005.78
D) $1,427.01
E) $2,429.16

Compounded Monthly

An interest calculation method where interest is added to the principal balance monthly, causing the subsequent interest to be based on the new, higher balance.

12%

A percentage value often referring to an interest rate, growth rate, or efficiency ratio.

1 Year Ago

Refers to something that happened or was the case twelve months prior to the current date.