Question

Kayla needs $14,000 worth of new equipment for his shop. He can borrow this money at a discount rate of 10% for a year.

Find the amount of the loan Kayla should ask for so that the proceeds are $14,000.

Maturity = $

Answer 1

$15400

Explanation:

Principle amount, P = $14000

Time, T = 1 year

Rate of interest, R = 10%

We know that maturity amount,

`A = P\left (1+(R)/(100) \right )^(n)`

where n is number of years

`A = P\left (1+(R)/(100) \right )^(n)`

`A = 14000\left (1+(10)/(100)\right )^(1)`

`A = 14000\left (1+(1)/(10)\right )`

`A = 14000\left ((11)/(10)\right )`

`A = 15400`

The maturity amount is $15400