Question

Ryan has an eight–year loan for $6,000. He is being charged an interest rate of 5 percent, compounded annually. Calculate the total amount that he will pay. $7,657.69 $8,815.97 $8,864.73

Answer 1

Hi there
The formula is
A=p (1+r)^t
A future value?
P present value 6000
R interest rate 0.05
T time 8 years

A=6,000×(1+0.05)^(8)
A=8,864.73

Hope it helps

Answer 2

For this case we have an equation of the form:

`y = A (b) ^t`

Where,

• A: present value
• b: rate of change
• t: number of years
• y: future value

Therefore, substituting the data of the problem in the given equation we have:

`y = 6000 * (1.05) ^ 8\\y = 8864.73`

Answer:

the total amount that he will pay is $ 8,864.73