Question

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

Answer 1

`\$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`