Question

A college loan of $23,000 is made at 4% interest, compounded annually. After t years, the amount due is given by A(t) = 23,000(1.04)ⁿ.

A. How much is due at the end of 10 years?
B. When the amount due

Answer 1

The amount due at the end of 10 years is approximately $32,010.76.

Step-by-step explanation:

To find out how much is due at the end of 10 years, we can use the formula for compound interest: A(t) = P(1+r)^t, where A(t) is the amount due after t years, P is the principal amount, r is the interest rate, and t is the number of years. Substituting the given values, we have A(10) = 23,000(1+0.04)^10. Evaluating this expression, we find that the amount due at the end of 10 years is approximately $32,010.76.