Question

3.8 You borrow $600. You pay 5% interest compounded annually. How much

do you owe at the end of 4 years? *

Answer 1

The answer = $ 729.30375

Explanation:

The principal amount ( P ) = $ 600 .

Interest rate ( r ) = 5 % annually.

Time period ( t ) = 4 year.

Amount ( A ) = ?

A =
`P ( 1 + r )^(t)` = 600
`( 1 + 0.05)^(4)` = 600 * 1.21550625 = $729.30

Answer 2

Therefore ,I owe $729.30 at the end of 4 years.

Explanation:

Given, I borrow $600. I pay 5% interest compounded annually .

Here P= $600 , r =5% and n = 4 years

`{\textrm{Amount}} (A)=P(1+(r)/(100) )^n`

`= 600 (1+(5)/(100))^4`

= $729.30

Therefore ,I owe $729.30 at the end of 4 years.