Question

The office manager of First Tech Support borrowed $25,000 to purchase new computers for employees. The bank charges 6 percent interest for 4 years. How much interest will the company pay in all?

Answer 1

Answer: $6,000

Explanation:

Answer 2

Given:

Amount borrowed (P)= $25000

Rate of interest (r)= 6%

Time (t)= 4 years.

To find:

The total interest the company pay in all.

Solution:

We know that,

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

where, A is amount, P is principal, r is rate of interest and t is time period.

`A=25000(1+(6)/(100))^4`

`A=25000(1.06)^4`

`A=25000(1.26247696)`

`A=31561.924`

Now,

`I=A-P`

`I=31561.924-25000`

`I=6561.924`

Therefore, the total interest is $6561.924.