An amount of $15000 is borrowed for 13 years at 3.25% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be paid back?

Question

Slade Jones

Mathematics

23 May, 23:27

An amount of $15000 is borrowed for 13 years at 3.25% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be paid back?

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Answers (1)

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Jacob Hayden · Answer 1

22733.28$ (This is a rounded approximate answer)

Step-by-step explanation:

The equation for exponential growth is A = P (1 + r) ^n where A is the total money (interest), P is the principal, r is the rate (compound interest rate) and n is the amount of time. If you look closely and read carefully, you will find out that the principle is $15000. The rate is 0.0325 (converted into decimal) and the time is 13 years. If you plug in all of this, you should get A = 15000 (1.0325) ^13, and A will equal approximately 22733.28$.