Question

You would like to purchase the car in 4 years. How much money will you need to invest at a 3% interest rate compounded annually in order to have $15,000 in 4 years? Use the compound interest formula A = P (1 + i)n. (Round final answer to the nearest cent, but otherwise don’t round any intermediate values) SHOW Work 100 POINTS

Answer 1

Since this is simple interest, there's a formula to calculate the interest. Once you find the interest you can add that back to the principal and get your total amount paid.

Here's the formula: Interest = principal * rate * time.

We don't know the interest of the loan or the extra money you have to pay on top of the 10,000 borrowed. Anyways, plug in what you got to find the interest.

Interest = 10000 * .03 * 6

Interest = 1800.

This is the extra amount you've to pay while also paying the 10,000 back. To find out the total amount, just add the interest to the amount borrowed which is the 10,000.

So, 10,000 + 1800 = $11,800. That's the total amount that you'll pay. Hope this helped!

Explanation: