Question

an amount of $24,000 is borrowed for 13 years at 5.5% interest compounded annually if the loan is paid in full at the end of the period how much must be paid back?

Answer 1

Given:

P = $ 24, 000

r = 5.5 % = 0.055

t = 13 years

n = 1 (compounded annually)

Required: Amount of the loan if paid in full after 13 years, A

Solution

$\begin{gathered} A=P(1+\frac{r}{n^{}})^{nt} \\ A=24,000(1+\frac{0.055}{1})^{(1)(13)} \\ A=48,138.57 \end{gathered}$

Answer:

$ 48,138.57 much must be paid back in full at the end of the period