Question

Emma loans 44,225 to a friend and charges them 15% interest, compounded annually. How much interest, will Enna's friend pay her back if it takes 2 years?

Answer 1

Emma's friend will pay $12,746.38 in interest.

Step-by-step explanation:

To calculate the interest, we can use the formula:

Interest = Principal * (1 + rate)^time - Principal

In this case, Emma loans $44,225 to her friend. The interest rate is 15%, compounded annually. The time is 2 years. Plugging in these values, we get:

Interest = $44,225 * (1 + 0.15)^2 - $44,225

Calculating this, we find that Emma's friend will pay $12,746.38 in interest.