Question

QUESTION

Learning Page
An amount of $49,000 is borrowed for 11 years at 6.5% Interest, compounded annually. If the loan is paid in full at the end of that period, how much must be
paid back?
plz help

Answer 1

$97,958.42

Explanation:

To solve this problem we can use the compound interest formula which is shown below:

`A=P(1+r )^(t)`

P = initial balance

r = interest rate

t = time

First change 6.5% to its decimal form:

6.5% ->
`(6.5)/(100)` -> 0.065

Next plug in the values:

`A=49,000(1+.065)^(11)`

`A=97,958.42`

They have to pay back $97,958.42