Question

An amount of $38,000 is borrowed for 10 years at 7.25% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be paid back?

Use the calculator provided and round your answer to the nearest dollar.

Answer 1

$76,516.77

Explanation:

Use the compound interest formula. A = P(1 + r/n)^t. Subsitute the values in and solve.

Answer 2

• $76517

Explanation:

Given

• Amount = $38000
• Interest rate = 7.25%
• Time = 10 years
• Compound = 1 per year

Total:

• 38000*(1 + 0.0725)^10 = 76516.76 ≈ $76517 rounded to the nearest dollar