Question

An amount of $40,000 is borrowed for 11 years at 7 5% interest compounded annually. If the loan is paid in full at the end of that period, how much myst be paid back?
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Answer 1

Amount to be paid back = $ 88,624.36

Step-by-step explanation:

Principal amount = $ 40,000

Rate of interest = 7.5%

Number of years = 11

$A=P\left(1+\frac{r}{n}\right)^{n t}$

Plugin the values as,

$A=40000\left(1+\frac{7.5}{100}\right)^{11}$

$A=40000(1+0.075)^{11}$

$A=40000(1.075)^{11}$

$A=\ 88,624.36$