Question

You lend out S5500 at 10% compounded monthly. If the debt is repaid in 18 months, what is the total owed at the time of repayment?

Answer 1

Answer:

$6386.1140

Step-by-step explanation:

Using the compound interest formula :

A = P(1 + r/n) ^nt

P 5500 ; rate, r = 10% = 0.10 ; t = 18 months = 18/12 = 1.5 years,

Compounding times per period = 12 (monthly)

A = 5500(1 + 0.1/12)^12*1.5

A = 5500(1 + 0.0083333)^18

A = 5500(1.0083333)^18

A = 5500 * 1.1611116

A = 6386.1140

Hence, amount to be repaid = $6386.1140