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2 votes
Determine how much you would receive in return for a 8 month, $500 loan to a friend if you charged the 3% annual interest.

User Reda
by
3.2k points

2 Answers

4 votes

Answer:

I think it is $15

Explanation:

Taking the test now.

User Oliver Friedrich
by
3.4k points
7 votes

Answer:

You would receive $510.08 in return.

Explanation:

In order to find the answer, you can use the formula to calculate the future value:

FV=PV*(1+i)^n

FV=future value

PV= present value= 500

i= interest rate=0.03/12=0.0025 per month

n= number of periods of time= 8

Now, you can replace the values in the formula:

FV=500*(1+0.0025)^8

FV=500*(1.0025)^8

FV=510.08

According to this, the answer is that you would receive $510.08 in return.

User Sarwar Hasan
by
3.7k points