Compound interest is the interest based on the initial loan taken out and the interest accumulated with time
The amount owed at the end of 5 years is approximately $<u>48,994.16</u>
The known loan information are;
The loan principal amount, P = $30,000
The annual interest rate, r = 10%
The rate at which the interest is compounded = Every microsecond
Required:
The amount of money owed at the end of the five years
Solution:
The compound interest formula is presented as follows
Where;
Interest per period, <em>i</em> = r/n
t = The number of years = 5 years
Which gives;
The number of microseconds in a year, n = 3.15576 × 10¹³ microseconds
By plugging in the values, we get;
The amount owed at the end of 5 years ≈ $<u>48,994.16</u>
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