Question

An amount of $23,000 is borrowed for 11 years at 6.75% 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

Given that,

An amount of $23,000 is borrowed for 11 years at 6.75% interest, compounded annually.

To find the Amount paid back after 11 years.

Step-by-step explanation:

we know that,

The formula to find the,

Amount after n years of interest rate r% compounded annually is,

`A=P(1+(r)/(100))^n`

where P is the initial amount.

Here, we have that,

P=$23,000

r=6.75

n=11

Substitute the values we get,

`A=23000(1+(6.75)/(100))^(11)`

Solving this we get,

`A=23000(1+0.0675)^(11)`
`A=23000(1.0675)^(11)`
`A=23000(2.05138)`
`A=47181.805`

Round to the nearest dollar.

`A=47181.805\approx47182`

Answer is: Amount paid back is $47182 after 11 years