Question

Jessica borrowed 5,000 and interest is compounded annually at 5.5% for 12 years. What is the total repayment, paid to the bank, at the end of that time?

Answer 1

To find the total repayment or total amount after 12 years, we would apply the formula for calculating compound interest which is expressed as

A = P(1 + r)^nt

where

A is the total amount after t years

P is the principal or initial amount