Question

Sarah needs a $7,600 loan in order to buy furniture for her home if the bank offers her a 30 month loan at 7 3/8% interest compounded annually how much will she have to repay the bank?

Answer 1

To calculate the amount Sarah will have to repay the bank for a $7,600 loan over 30 months at 7 3/8% interest compounded annually, we can use the compound interest formula: Amount = Principal Amount * (1 + Interest Rate/100)^(Number of Years).

Step-by-step explanation:

To calculate the amount Sarah will have to repay the bank, we can use the compound interest formula:

Amount = Principal Amount * (1 + Interest Rate/100)^(Number of Years)

In this case, the principal amount is $7,600, the interest rate is 7 3/8% or 7.375%, and the number of years is 30 months divided by 12 months per year, which is 2.5 years.

Therefore, the amount Sarah will have to repay the bank is:

Amount = $7,600 * (1 + 7.375/100)(2.5)