Question

Ross purchased a new commercial vehicle today for $25,000. the entire amount was financed using a five-year loan with a 4 percent interest rate (compounded monthly). how much will ross owe on his vehicle loan after making payments for three years?

Answer 1

Answer:

$28,121

Explanation:

The formula for compound interest is A=P(1+r/100)t, (t) is in the exponent.

P=25,000

r=4

t=3

Once we input the values it will be: A=25000(1+4/100)3

And so our answer is $28,121

P.S The reason we are using compound interest formula is bcz the said (compounded monthly)