Question

What is the total amount that Matthew's bank will receive after lending him $8,000 for four years at an interest rate of 6 percent, compounded annually?

Answer 1

Answer:

Total amount that Matthew's bank will receive is $10099.81.

Step-by-step explanation:

We need to find the amount Matthew's bank will receive after lending him $8,000 for four years at an interest rate of 6 percent, compounded annually.

The formula for compound interest is:

$A=P(1+r)^n$

Where A = future value

P= Principal Amount

r = interest rate

and n= time

So in the question we are given:

P= $8000

r = 6% or 0.06

t = 4 (since 4 yeras compounded annually)

A= 8000*(1+0.06)^4

A= 8000*(1.06)^4

A= 10099.81

So, total amount that Matthew's bank will receive is $10099.81.