Use the formula for compound interest,
Where P is the starting amount (500$), r is the rate of interest (0.04), n is the number of times the interest is compounded per unit (1 per year), and t is the amount of time it is compounded (5 years).
Now, plug it into the formula:
Do the math, and your answer is she must pay <span>608.32$ when she pays her debts.</span>
Where P is the starting amount (500$), r is the rate of interest (0.04), n is the number of times the interest is compounded per unit (1 per year), and t is the amount of time it is compounded (5 years).
Now, plug it into the formula:
Do the math, and your answer is she must pay <span>608.32$ when she pays her debts.</span>