Question

Rahul has a loan of 7000 dollars.

He pays 2% per month compound interest.
How much will he pay if he has the loan for two months

Please include the formula to this question! Thank you very much! :)

Answer 1

You are given a loan of 7000 dollars from Raul. He pays 2% per month compound interest. You are required to find how much he will be paying if he loaned it for 2 months. We have the equation A = P(1+r/n)^nt where A is the final amount, P is the principal amount, r is the rate of interest, n is the number of times per year and t is the time.

A = P(1+r/n)^nt
7000 = P(1+0.02/12)^(12)(2/12)
P = 6976.72 dollars