Question

Jenny borrowed $500 for five years at 4 percent interest, compounded annually. What is the total amount she will have paid when she pays off the loan? total amount = P (1 + i)t $608.33 $729.99 $765.77

Answer 1

I believe the answer will be $608.33 because when you add the amount that the interest made you would end up getting 608.33.

Answer 2

$608.33

Explanation:

Jenny borrowed =$500

Here, Principal=$500

Rate=4%

time= 5 years

As we know the formula of amount compounded annually

Amount= p[
`((1+r)^(5) )/(100^(5) )`

Amount=$500[
`((100+4)^(5) )/(100^(5) )`

Amount=500×
`(26)/(25)`×
`(26)/(25)`×
`(26)/(25)`×
`(26)/(25)`×
`(26)/(25)`

Amount=$608.33

Hence, the correct answer is $608.33