Question

Submit a full solution (your final answer AND your work) to the problem below.

Suppose you take out a $10,000 student loan at 8% interest per year, compounding annually. After 4 years, what will be the total balance of this loan? (Hint: It'll be bigger than $10k...)

Answer 1

Explanation:

after the first year its 10000÷100*8+10000=10800. after the second year its 10800÷100*8+10800=11664. after the third year its 11664÷100*8+11664=12597.12. and after the fourth year its 12597.12÷100*8+12597.12=13,604.8896$. If you want you can round it up to 13,605$