Question

you take out a loan for $702 at an annual interest rate of 6% compounded quarterly for 2 years what is the total amount that you will have at the end of the two-year

Answer 1

you take out a loan for $702 at an annual interest rate of 6% compounded quarterly for 2 years what is the total amount that you will have at the end of the two-year ​

we know that

The compound interest formula is equal to

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

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

where

A is the total amount at the end of two years

P is the loan

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

P=$702

r=6%=6/100=0.06

t=2 years

n=4

substitute the given values in the formula

`\begin{gathered} A=702\cdot(1+(0.06)/(4))^(4\cdot2) \\ A=702\cdot(1.015)^8 \\ A=\$790.80 \end{gathered}`

therefore

the answer is

$790.80