Question

The office manager of First Tech Support borrowed $25,000 to purchase new computers for employees. The bank charges 6 percent interest for 4 years. How much interest will the company pay in all?

Answer 1

Given:

Amount borrowed (P)= $25000

Rate of interest (r)= 6%

Time (t)= 4 years.

To find:

The total interest the company pay in all.

Solution:

We know that,

$A=P(1+r)^t$

where, A is amount, P is principal, r is rate of interest and t is time period.

$A=25000(1+\dfrac{6}{100})^4$

$A=25000(1.06)^4$

$A=25000(1.26247696)$

$A=31561.924$

Now,

$I=A-P$

$I=31561.924-25000$

$I=6561.924$

Therefore, the total interest is $6561.924.