Question

Finding a final amount in a word problem on exponential growt...

An amount of $25,000 is borrowed for 15 years at 5.5% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be
paid back?

Answer 1

9514 1404 393

Answer:

$55,811.91

Explanation:

The amount with interest is given by the formula ...

A = P(1 +r)^t

where r is the annual interest rate and t is the number of years.

A = $25000(1.055^15) ≈ $55,811.91

The amount due at the end of 15 years will be $55,811.91.