Answer:
We must pay back US$ 64,767.70 for the loan after 7 years.
Step-by-step explanation:
1. Let's review the data given to us for answering the question:
Loan amount = US$ 41,000
Duration of the loan = 7 years
Interest rate = 6.75% compounded annually
2. Let's find the future value of this loan after 7 years, using the following formula:
FV = PV * (1 + r) ⁿ
PV = Loan = US$ 41,000
number of periods (n) = 7 (7 years compounded annually)
rate (r) = 6.75% = 0.0675
Replacing with the real values, we have:
FV = 41,000 * (1 + 0.0675) ⁷
FV = 41,000 * (1.0675) ⁷
FV = 41,000 * 1.5797
FV = US$ 64,767.70
We must pay back US$ 64,767.70 for the loan after 7 years.
