Question

Jenny borrowed $500 for five years at 4 percent interest. compounded annually. What is the total amount she will have paid when she pays off

the loan?
total amount = P(1+1)

Answer 1

Explanation:

Answer:

$608.33

Explanation:

Jenny borrowed =$500

Here, Principal=$500

Rate=4%

time= 5 years

As we know the formula of amount compounded annually

Amount= p[

Amount=$500[

Amount=500×××××

Amount=$608.33

Hence, the correct answer is $608.33

Answer 2

The total amount due in the future (F) for the current loan (P) with compound interest (i) is calculated through the equation,

F = P x (1 + i)^n

where n is the number of years. Substitute to the equation, the values given above,

F = ($500) x (1 + 0.04)^5 = $608.326

Thus, Jenny would pay approximately $608.326.