Question

If $25,000 is borrowed with an interest of 8.0% compounded annually, what is the total amount of money needed to pay it
back in 10 years?
Round your answer to the nearest cent.
Do NOT round until you have calculated the final answer.

Answer 1

Answer:

$\frac{8}{?100} \times 25000$

=2000

365×10=3650

2000×3650=7300000

Answer 2

$~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\ 25000\\ r=rate\to 8\%\to \frac{8}{100}\dotfill &0.08\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{annually, thus once} \end{array}\dotfill &1\\ t=years\dotfill &10 \end{cases} \\\\\\ A=25000\left(1+\frac{0.08}{1}\right)^{1\cdot 10}\implies A=25000(1.08)^{10}\implies A\approx 53973.12$