kfiallos
contestada

Beth will borrow $10,000 which earns 4% compound interest and she will repay that amount in 20 years. How much interest was earned on her loan?

Question 4 options:

$8,000


$21,911.23


$11,911.23


$18,000

Respuesta :

calculista

Answer:

[tex]I=\$11,911.23[/tex]

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

[tex]A=P(1+\frac{r}{n})^{nt}[/tex]  

where  

A is the amount that she will repay  

P is the amount borrowed  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

[tex]t=20\ years\\ P=\$10,000\\ r=0.04\\n=1[/tex]  

substitute in the formula above  

[tex]A=10,000(1+\frac{0.04}{1})^{1*20}[/tex]  

[tex]A=10,000(1.04)^{20}[/tex]  

[tex]A=\$21,911.23[/tex]  

Find out the interest

[tex]I=A-P[/tex]

substitute the values

[tex]I=\$21,911.23-\$10,000=\$11,911.23[/tex]

Otras preguntas