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g100num [7]
3 years ago
9

The balance on a car loan after 4 years is $8,996.32. The interest rate is 5.6% compounding annually. What was the initial value

of the loan?
Mathematics
1 answer:
NISA [10]3 years ago
5 0
To evaluate the initial value we use the formula:
A=P(1+r)^n
where
A=future value
P=principle amount
r=rate
n=time
thus plugging in our values we get:
8996.32=P(1+5.6/100)^4
solving for p we shall have:
8996.32=1.2435P
hence:
P=$7234.5
Thus the initial amount was $7234.5
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