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Sagot :
The loan is defined as the liability and present on the liability side of balance sheet. At the time of graduated $1,926.97 interest capitalization has occurred.
What is Interest Capitalization?
Interest capitalization generally increased the overall cost of loan through adding the amount that is unpaid to the principal amount.
Given the following :
- Loan amount (L) = 8,180
- Interest rate (I) = 5.3%
- Period (n) = 4 years
Using the formula:-
A = L(1 + I/t)^nt
Where, A = final amount
t = number of compounding periods per year
A = 8180( 1 + 0.053/12)^(4 * 12)
A = 8180 ( 1 + 0.0044166)^48
A = 8180 * ( 1.0044166)^48
A = 8180 * 1.2355709
A = 10106.970
Final amount after 4 years = 10,106.970
Hence, amount Paid as interest over that period will be :
=Final amount - Loan amount
=10,106.970 - 8,180
= $1,926.97
Learn more about interest capitalization, refer to the link:
https://brainly.com/question/1435593
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