Allyson took out a loan for $8,500 to pay for a trip to Europe. If this was a 4-year loan with monthly payments of $212.50, what
1 answer:
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Answer:
$3027.80
Explanation:
The compound interest formula is the following.
where
A = final amount
P = principle amount
r = interest rate / 100
n = number of compounds per interval
t = time interval
Now in our case,
A = unknown
P = $1900
r = 10.4/100
n = 12 months / year ( because the interest is compounded monthly)
t = 4.5 yrs
Therefore, the compound interest formula gives
Using a calculator, we evaluate the above to get
which is our answer!