Question

If a lender makes a simple loan of ​$500 for 5 years and charges 3%, then the amount that the lender receive at maturity is ​$(____) . (Round your response to the nearest two decimal​ place)

Answer 1

A = P (1 + i)^5

A is amount received after 5 years and i is the annual interest payment

A = 500 * 1.03^5 = 579.64