Question

HELP HELP !! & PlEASE SHOW WORK ! What would be the compound interest rate if Tom borrowed $6,000 at a 3% interest rate for 2 years?

$365.40
$185.40
$180.00
$250.00

Answer 1

Compound interest = $365.4

Explanation:

Given:

Amount borrowed = $6,000

Rate of interest = 3%

Number of year = year

Find:

Compound interest

Computation:

A = P[1+r]ⁿ

Amount after 2 year = 6,000[1 + 3%]²

Amount after 2 year = 6,000[1 + 0.03]²

Amount after 2 year = 6,000[1.03]²

Amount after 2 year = 6,000[1.0609]

Amount after 2 year = 6,365.4

Compound interest = Amount after 2 year - Amount borrowed

Compound interest = 6,365.4 - 6,000

Compound interest = $365.4