Question

a customer purchases windows for $15,000 using a credit card. If the interest is compounded monthly at a rate of 16% per year, how much interest will be charged at the end of three years?​

Answer 1

The future amount A is calculated as

A = P (1+\frac{r}{n}) ^{nt}(1+nr)nt

P is the Principle

r is interest rate

n is number of times per year compounding happens

t is the number of years

Answer 2

≈ $9164.35

Explanation:

The future amount A is calculated as

A = P
`(1+(r)/(n)) ^(nt)`

P is the Principle

r is interest rate

n is number of times per year compounding happens

t is the number of years

Here P = 15000 , r = 16% = 0.16, n = 12 , t = 3

A = 15000
`(1+(0.16)/(12)) ^((12(3)))`

= 15000 (
`(1.01333)^(36)`

≈ 24164.35

Interest paid = $24164.35 - $15000 = $9164.35