Question

An amount of $36,000 is borrowed for 6 years at 4.75% interest, compounded annually. if the loan is paid in full at the end of that period, how much must be paid back?

Answer 1

the formula is

`A=P(1+r)^t`
A=future amount
P=present amount or princpal
r=rate in decimal
t=time in years

so

given
P=36000
r=4.75%=0.0475
t=6


`A=36000(1+0.0475)^6`

`A=36000(1.0475)^6`
use your calculator
A=47558.340
round to nearest cent
A=$47558.34

must pay back $47558.34