Question

Nicole borrowed $8000 at a rate of 7.5%, compounded annually. Assuming she makes no payments, how much will she owe after 4 years? Do not round any intermediate computations, and round your answer to

Answer 1

Nicole will owe $10,568.82 after 4 years.

Step-by-step explanation:

To calculate the amount Nicole will owe after 4 years with compound interest, we can use the formula for compound interest:

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

Where:

• A is the total amount after time t
• P is the principal amount (initial loan)
• r is the annual interest rate (as a decimal)
• n is the number of times compounded per year
• t is the number of years

In this case, Nicole borrowed $8,000 at a rate of 7.5% compounded annually. Plugging in these values, we have:

A = 8000(1 + 0.075/1)^(1*4)

Simplifying this, we get:

A = 8000(1.075)^4

A = 8000(1.32210256)

A = $10,568.82

Therefore, Nicole will owe $10,568.82 after 4 years.