Question

Brent Pokott borrowed $4000 from his brother Dave. He agreed to repay the money at the end of 3 years, giving Dave the same amount of interest that he would have received if the money had

been invested at 1.25% compounded quarterly. How much money did Brent repay his brother?

(Round to the nearest cont as needed)

Answer 1

Answer: Brent repay $4152.61 to his brother.

Explanation:

Formula to calculate compound amount :
`A =P(1+(r)/(4))^(4t)`

, where P= principal amount

r= rate of interest (in decimal)

t= time

As per given, we have

P= $4000

t= 3 years

r= 1.25% = 0.0125 [we divide a percentage by 100 to write in simple form]

Now, substitute these values in the formula

`A=4000(1+(0.0125)/(4))^(4*3)\\\\=4000(1.003125)^(12)\\\\=4000*1.03815129256\\\\\approx4152.61 \ \ [\text{To the nearest cent.}]`

Hence, Brent repay $4152.61 to his brother.