A student borrows $10 000 at an interest rate of 4% per annum, compounded monthly. a) If the student pays the loan off in 10 years, how much does the student pay in interest? # of compounding periods/year=12 total # of compounding periods = 12 x 10 = 120 Interest rate/compounding period = 4/12 = .33 Formula = 10,000 (1.0033)^120 =14849 = $4,849 in interest was paid in interest b) If the entire loan costs the student $20 000 to pay back, how many years was the loan for?
A student borrows $10 000 at an interest rate of 4% per annum, compounded monthly. a) If the student pays the loan off in 10 years, how much does the student pay in interest? # of compounding periods/year=12 total # of compounding periods = 12 x 10 = 120 Interest rate/compounding period = 4/12 = .33 Formula = 10,000 (1.0033)^120 =14849 = $4,849 in interest was paid in interest b) If the entire loan costs the student $20 000 to pay back, how many years was the loan for?
Intermediate Algebra
10th Edition
ISBN:9781285195728
Author:Jerome E. Kaufmann, Karen L. Schwitters
Publisher:Jerome E. Kaufmann, Karen L. Schwitters
Chapter11: Exponential And Logarithmic Functions
Section11.2: Applications Of Exponential Functions
Problem 27PS
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