Perry was going to sell all of his stamp collection to buy a video game. After selling half of them he changed his mind. He then
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Amount owed at the end of 1 year is 3640
<h3><u>Solution:</u></h3>Given that yoko borrows $3500.
Rate of interest charged is 4% compounded each year
Need to determine amount owed at the end of 1 year.
In our case :
Borrowed Amount that is principal P = $3500
Rate of interest r = 4%
Duration = 1 year and as it is compounded yearly, number of times interest calculated in 1 year n = 1
<em><u>Formula for Amount of compounded yearly is as follows:</u></em>
Where "p" is the principal
"r" is the rate of interest
"n" is the number of years
Substituting the values in above formula we get
Hence amount owed at the end of 1 year is 3640