How much do you owe after one year without making any payments on a loan?

Question:

If you have a loan for $1000.00 at 7.65% APR and do not make any payments, how much will you owe in total after one year?

Answer:

In total, you will owe $1316.50 after one year if you have a $1000 loan at 7.65% APR and do not make any payments, which includes the original loan amount, one year's interest, and non-payment penalties.

Have you ever wondered how much you would owe after one year if you didn't make any payments on a loan? Let's break it down!

Firstly, with a loan amount of $1000.00 at an Annual Percentage Rate (APR) of 7.65%, you would accrue $76.50 in interest over the course of one year.

Additionally, there is a penalty of 2% of the original loan amount when the $100.00 monthly payment is not made. This penalty, totaling $20.00 per month, would amount to $240.00 over the course of a year.

When you combine the original loan amount, the interest, and the penalties, the total amount you would owe after one year without making any payments would be $1316.50.