Question

Sara borrowed $500 for four years at 3 percent interest, compounded annually. Use the formula to calculate the total amount she will have paid back. $515.03 $562.75 $2060

Answer 1

A=500×(1+0.03)^(4)
A=562.75

Answer 2

Answer: $562.75

Explanation:

Given : Principal amount ( Initial amount) P=$500

Time period x= 4 years

Rate of interest r= 3%=0.03

We know that the compound amount after x years will be given by :-

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

According to the given question, we have

`A=500(1+0.03)^4\\\Rightarrow\ A=500(1.03)^4\\\Rightarrow\ A=562.7544\approx562.75`

Hence, the total amount Sara will have paid back = $562.75