Question

you owe $1000 on a furniture loan. the bank charges a compound interest rate of 14.9% per year. if you don't make any payments on the loan, how much will you owe after 2 years? round your answer to the nearest whole cent

Answer 1

Amount in compound interest = p(1 + r)^n where p is the initial deposit, r = rate and n = period.
Here, Amount after 2 years = 1000(1 + 14.9/100)^2 = 1000(1 + 0.149)^2 = 1000(1.149)^2 = 1000(1.320201) = $1,320.20