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Borrowed 8000 at a rate of 12% compound monthly, no payments how much will be owed after 7 years?

User KoJoVe
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1 Answer

2 votes

Answer:


\$18,453.78

Explanation:

The compound interest formula is equal to


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

where

A is the Final amount owed

P is the amount borrowed

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have


t=7\ years\\ P=\$8,000\\ r=12\%=12/100=0.12\\n=12

substitute in the formula above


A=8,000(1+(0.12)/(12))^(12*7)


A=8,000(1.01)^(84)


A=\$18,453.78

User Jmagder
by
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