Question

Find the amount erica owes at the end of 6 years if $60000 is loaned to her at a rate of 4% compounded monthly

Answer 1

Answer: $76,244.51

Explanation:

You need to use the compound interest formula here.

First of all however, you need to convert the terms to monthly figures because the interest is compounded monthly.

4% in months = 4 / 12 = 4/12%

6 years = 6 * 12 = 72 months

Now use the compound interest formula:

= Amount * (1 + rate) ^ number of years

= 60,000 * ( 1 + 4/12%) ⁷²

= $76,244.51