Question

Tammy borrowed $5000 at a rate of 12% compounded monthly. Assuming she makes no payments, how much will she owe after 9 years?

Answer 1

Answer:

$14,644.63

Step-by-step explanation:

To solve this problem we can use the compound interest formula which is shown below:

$A=P(1+\frac{r}{n} )^{nt}$

P = initial balance

r = interest rate

n = number of times compounded annually

t = time

First change 12% into a decimal:

12% -> $\frac{12}{100}$ -> 0.12

Lets plug in the values:

$A=5,000(1+\frac{0.12}{12})^{9(12)}$

$A=14,644.63$

Tammy will own $14,644.63 after 8 years,