Question

A bank offers a loan for $8,000 which earns 4.25% interest compounded annually. What is the correct formula to determine how much someone would owe the bank if they took out this $8,000 loan for 5 years?
A. A = 8,000(1 + 0.0425)5

B. A = 8,000(0.0425)5

C. A = 8,000(0.0425)(5)

D. A = 8,000(1 - 0.0425)5

Answer 1

Answer:

C, A = 8,000(0.0425)5