Question

Lily provider a loan of $2500 to David that had an annual interest rate of 4.6%. Find the balance after 5 years if itcompounded yearly

Answer 1

Answer:

The balanced amount is $3130.25.

Step-by-step explanation:

Given : Lily provider a loan of $2500 to David that had an annual interest rate of 4.6%.

To find : The balance after 5 years if it compounded yearly ?

Solution :

Using compound interest formula,

$A=P(1+\frac{r}{n})^{nt}$

Where, P=$2500 is the principal

r=4.6%=0.046 is the interest rate

t=5 years

Substitute the values,

$A=2500(1+\frac{0.046}{1})^{5\times 1}$

$A=2500(1.046)^{5}$

$A=2500\times 1.2521$

$A=3130.25$

Therefore, the balanced amount is $3130.25.