Question

HEE 1 15. Mary decides to take out a $4,000 student loan this year. If she will pay 10% interest compounded annually, how much will the total loan amount be in four years when she graduates?​

Answer 1

Answer: 5,600

Explanation: By multiplying 0.10 (4,000) to find the interest for one year, you get 400. Because she is using this loan for 4 years you multiply that one year interest by 4. 400 times 4 is 1600. Then, you add that 1600 (which is the total interest for 4 years) to the loan, to get an answer of 5,600.