Final answer:
By using the compound interest formula, the total amount you will pay back after borrowing $59,000 for 3 years at an 11% annual compound interest rate will be $80,689.93.
Step-by-step explanation:
Calculating Compound Interest for a Loan:
When you borrowed $59,000 for 3 years at 11% interest compounded annually, you need to calculate the final amount using the compound interest formula:
A = P (1 + r/n)^(nt)
Where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (decimal).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested or borrowed for, in years.
For your loan:
- P = $59,000
- r = 11% or 0.11
- n = 1 (since interest is compounded annually)
- t = 3 years
Plugging these values into the formula:
A = 59000 * (1 + 0.11/1)^(1*3)
A = 59000 * (1.11)^3
A = 59000 * 1.367631
A = $80,689.93
You will pay back a total of $80,689.93 at the end of the 3 years.