Jane Smith took out a loan for $40,000 to pay for her child's education. The loan would be repaid at the end of eight years in one payment with interest of 12%. What is the total amount Jane has to pay back at the end of the loan?

Question

Karson Delgado

Mathematics

11 June, 18:10

Jane Smith took out a loan for $40,000 to pay for her child's education. The loan would be repaid at the end of eight years in one payment with interest of 12%. What is the total amount Jane has to pay back at the end of the loan?

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Answers (1)

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Antoine Andersen · Answer 1

99 038.52 USD

Step-by-step explanation:

In order to solve this question we have to use the compound interest formula

A = P * (1+i) ˆn

A: final amount including principal

P: principal amount

i: interest per year

n: total number of years

A = 40000 (1+0.12) ˆ8

A = 99 038.52 USD