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23 November, 22:12

You owe $1000 on a furniture loan. the bank charges a compound interest rate of 14.9% per year. if you don't make any payments on the loan, how much will you owe after 2 years? round your answer to the nearest whole cent

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  1. 23 November, 22:23
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    Amount in compound interest = p (1 + r) ^n where p is the initial deposit, r = rate and n = period.

    Here, Amount after 2 years = 1000 (1 + 14.9/100) ^2 = 1000 (1 + 0.149) ^2 = 1000 (1.149) ^2 = 1000 (1.320201) = $1,320.20
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