Question

an amount of 16000 is borrowed for 8 years at 3% interest, compounded annually. if the loan is paid in full at the end of that period, how much must be paid back?

Answer 1

He must pay back 20268.32 of amount after borrowing 16000 for 8 years at the interest rate of  3% for one year.

How to calculate loan amount ?

• The term "Loan Amount" refers to the sum of money we currently owe you for this mortgage. The loan amount may also include other fees, interest , defaulted payments, interest on defaulted payments, principal, and interest on unpaid principal.

• The amount of interest due each period expressed as a percentage of the amount lent, deposited, or borrowed is known as an interest rate. The total interest on a loaned or borrowed sum is determined by the principal amount.

Amount he borrowed = 16000

No. of years = 8 years

Rate of interest = 3%

Calculate full amount (A) :

Equation for A = P(1 + r/n)^(nt)

A =  16000(1 + .03)^8

A = 20268.32

He need to pay 20268.32 after 8 years.

To learn more about Loan amount refer :

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