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Auto Lenders made a car loan of $15,000. The borrower will pay the loan back in 6 years, with a 10.25% compound interest rate applied annually. What is the total repay amount for the borrower?

User Dantio
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1 Answer

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Final answer:

The total repayment amount for the borrower is $24,556.76.

Step-by-step explanation:

To calculate the total repayment amount for the borrower, we need to use the compound interest formula. The formula is:

A = P(1 + r/n)^(nt)

Where A is the total amount, P is the principal (loan amount), r is the interest rate, n is the number of times the interest is compounded per year, and t is the number of years.

In this case, the principal (loan amount) is $15,000, the interest rate is 10.25%, compounded annually, the number of times compounded per year is 1, and the number of years is 6. Plugging these values into the formula:

A = 15000(1 + 0.1025/1)^(1*6)

A = $24,556.76

Therefore, the total repayment amount for the borrower is $24,556.76.

User Soomee
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