Question

A college student takes out a $7,500 loan from a bank. What will the balance of the loan be after one year. If the bank charges 3.8% interest each year

Answer 1

Explanation:

7785

Answer 2

The balance of the loan be after one year will be $7785

Explanation:

we are given

A college student takes out a $7,500 loan from a bank

so, P=7500

time is 1 year

so, t=1

the bank charges 3.8% interest each year

so, r=3.8%

r=0.038

now, we can use formula

`A=P(1+r)^(t)`

where

A is amount after t years

so, we can plug values

`A=7500(1+0.038)^(1)`

`A=7785`

So,

The balance of the loan be after one year will be $7785