Question

When a loan of principal amount, p, is taken at an annual interest rate i with a repayment period of n years, what is the total repayment amount, A?

A) A = p(1 + in)
B) A = pn(1 + i)
C) A = p(1 + i)^n
D) A = p + in

Answer 1

The total repayment amount, A, for a loan with principal amount, p, annual interest rate, i, and repayment period, n, can be calculated using the formula A = p(1 + i)^n.

Step-by-step explanation:

The total repayment amount, A, for a loan with a principal amount, p, an annual interest rate, i, and a repayment period of n years can be calculated using the formula:

A = p(1 + i)^n

Let's break down each part of the formula:

1. p: The principal amount of the loan
2. i: The annual interest rate as a decimal
3. n: The repayment period of the loan in years

By substituting the values into the formula and calculating, you can determine the total repayment amount, A.