Question

You borrow $7,000 from the Overton Credit Union to buy a used car. The credit union charges 6% interest, compounded monthly for 5 years. What’s the total amount you will have to pay back for this loan?

A= P(1+r/n) ^nt
A=Total amount after
P=Initial
r=percent rate as a decimal
n=number of times per year
t=time in years
O $7,431.74
O $9,441.95
O $9,367.58
O $9,380.67

Answer 1

Answer: 9441.95

P=7000
r=0.06
m=12
t=5
n=12(5)=60
Substitute into formula