Question

If $200 is borrowed with an interest of 18.0% compounded monthly, what is the total amount of money needed to pay it back in 1 year? Round your answer to the nearest dollar. Do not round at any other point in the solving process; only round your answer.

Answer 1

$239

Explanation:

Use the compound interest formula and substitute the given values:

A=$200(1+0.18/12)
`^(12(1))`

Simplify using the order of operations: A=$200(1.015)
`^(12)`=$200(1.195618171) ≈ $239.

Answer 2

239.12

Explanation:

A=$200(1+0.1812)12(1).

Simplify using the order of operations: A=$200(1.015)12=$200(1.195618171)≈$239.12.