Question

An amount of $ 42,000 is borrowed for 10 years at 6% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be paid back?

Use the calculator provided and round your answer to the nearest dollar.

Answer 1

A=p (1+r)^t
A=42,000×(1+0.06)^(10)
A=75,215.60

Answer 2

The rate will be 6% / 1,200 = 0.005
Number of payments = 120 months

Loan Cost Total = (r*prin*n) / (1 - (1+r)^-n)
Loan Cost Total = (.005 * 42,000 * 120) / (1- (1.005)^-120)
Loan Cost Total = 25,200 / (1 - 0.54963273336416 )
Loan Cost Total = 25,200 / 0.450367266635836
Loan Cost Total = 55,954.33