Question

A shipping company borrows $70 million at 5% p.a. compound interest to build a new cruise ship. If it repays the debt after 3 years, how much interest will the company pay?

Answer 1

Answer:

about 11.03 million

Step-by-step explanation:

Use the equation I = P(1+r/100)^n - P (I is the compound interest, P is the principle, r is the rate percent, and n is the number of years):

Substitute the values given:

I = 70,000,000(1 + 5/100)^3 - 70,000,000

Use a calculator to solve and you will get ~11.03 million.