Question

Wallace took out a $5000 loan for 6 years. he is being charged 4% interest, compounded annually. calculate the total.

A. $6,326,60
B. $6,312.38
C. $6,077.53

Answer 1

$6,326.60

Explanation:

A = P (1 + r/n)^(nt)

Where:

A = the future value of the investment/loan, including interest

P = the principal investment amount (the initial deposit or loan amount)

r = the annual interest rate (decimal)

n = the number of times that interest is compounded per year

t = the number of years the money is invested or borrowed for