Question

Another bank is also offering favorable terms, so Rahul decides to take a loan of $22,000 from this bank. He signs the loan contract at 8% compounded daily for six months. Based on a 365-day year, what is the total amount that Rahul owes the bank at the end of the loan's term? (Hint: To calculate the number of days, divide the number of months by 12 and multiply by 365.)

Answer 1

$22,897.74

Step-by-step explanation:

Given:

Loan amount (P) = $22,000

rate (R) = 8% = 8/100=0.08/365 = 0.000219178082

Number of days(n) = 6 month = (6 x 365)/12 = 182.5

Total Amount = ?

`A = P(1+ I)^n\\A = 22,000(1+0.000219178082)^(182.5)\\=22,000(1.000219178082)^(182.5)\\=22,000(1.04080658)\\= 22,897.744`

Therefore, he have to pay $22,897.74 to the bank.