Your friend says "Multiplying a number by 5 is a 500% increase" Describe and correct the error in your friend's reasoning.
1 answer:
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Answer:
$16,534.95
Step-by-step explanation:
To compute interest on loans, we use the compounded interest equation. We use the equation where
- P is the principle or starting value
- A is the total amount after interest and a period of time
- r is the rate at which interest gathers as a decimal
- t the time in years
- n is the number of times compounded in a year.
For this problem, we know P=$8000, r=19%=0.19, t=4 years and n=2. We substitute into the formula and simplify to find the total amount A.