Question

Amelia is taking out a student loan from her bank for college. Her loan is $18,000 with 4.5% interest every year. How much will Amelia's loan be after her 4 years in college? Round to the nearest cent.

Answer 1

$21,366.54

Explanation:

Assuming that the interest is compounded annually, we can use the formula:

A = P(1 + r/n)^(n*t)

Where:

A = the final amount

P = the initial principal (or amount borrowed)

r = the annual interest rate (as a decimal)

n = the number of times the interest is compounded per year

t = the number of years

In this case, P = $18,000, r = 0.045, n = 1 (compounded annually), and t = 4. Plugging in these values, we get:

A = 18000(1 + 0.045/1)^(1*4) = $21,366.54

Therefore, Amelia's loan will be $21,366.54 after her 4 years in college.