Question

Lily provider a loan of $2500 to David that had an annual interest rate of 4.6%. Find the balance after 5 years if itcompounded yearly

Answer 1

The balanced amount is $3130.25.

Explanation:

Given : Lily provider a loan of $2500 to David that had an annual interest rate of 4.6%.

To find : The balance after 5 years if it compounded yearly ?

Solution :

Using compound interest formula,

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

Where, P=$2500 is the principal

r=4.6%=0.046 is the interest rate

t=5 years

Substitute the values,

`A=2500(1+(0.046)/(1))^(5* 1)`

`A=2500(1.046)^(5)`

`A=2500* 1.2521`

`A=3130.25`

Therefore, the balanced amount is $3130.25.