Question

Kiara takes out a student loan of $4000. She will be charged interest on the loan at a rate of 2.5% compounded monthly. She plans to repay the loan in full at the end of 2 years. What is the amount of interest she will have to pay?

Answer 1

`\bf ~~~~~~ \textit{Compound Interest Earned Amount}\\\\A=P\left(1+(r)/(n)\right)^(nt)\quad \begin{cases}A=\textit{accumulated amount}\\P=\textit{original amount deposited}\dotfill &\$4000\\r=rate\to 2.5\%\to (2.5)/(100)\dotfill &0.025\\n=\begin{array}{llll}\textit{times it compounds per year}\\\textit{monthly, thus twelve}\end{array}\dotfill &12\\t=years\dotfill &2\end{cases}`

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