Question

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Sofia is taking out a loan for $12,500 with
an annual compound interest rate of 5% for
10 years. Sofia will not make
any additional
I deposits or withdrawals. How much
X interest will she have to pay at the end of
the loan period?
Round your answer to the closest dollar
amount. Do not include $ symbol in answer

Answer 1

Explanation:

At the end of 10 years she will owe $12,500 × 1.05¹⁰ ≈ $20,361.

$12,500 of that is the original loan, so the interest is $20,361 - $12,500 = $7,861