The amount owed at the end of 5 years.An amount

Rui Baldwin

Rui Baldwin

Answered question

2021-09-07

The amount owed at the end of 5 years.
An amount of $3000 is loaned at a rate of 10%compounded quarterly.

Answer & Explanation

Clara Reese

Clara Reese

Skilled2021-09-08Added 120 answers

Step 1
Formula used:
The compound interest formula, A=P(1+rn)nt
Here A is the amount after t years,
P is the principal amount,
r is the annual interest rate and n is number of periods the interest compounding.
Step 2
To find the amount owed at the end of 5 years, we will substitute P=3000, r=10%=10100=0.1, t=5 in the above compound interest formula and solve for A. Since the interest rate is compounded quarterly, so we substitute n=4. So, we get
A=P(1+rn)nt
=3000(1+0.14)4×5
=3000(1+0.025)20
=3000(1.025)20
$4915.85
Thus, the amount owed is approximately $4915.85 at the end of 5 years.

Do you have a similar question?

Recalculate according to your conditions!

Ask your question.
Get an expert answer.

Let our experts help you. Answer in as fast as 15 minutes.

Didn't find what you were looking for?