Question

Jayden wants to take out a loan of $2,500 with interest that compounds monthly. Use the formula A = P(1 + rn)n∗t to find which of these loan terms will have the lowest total cost.

Answer 1

Answer:

$3125

Step-by-step explanation:

Let,

Time = 2 years

R = 5 % = 0.5

Now,

A = 2500(1 + 0.5/2)¹

A = 2500 × (2 + 0.5/2)

A = 2500 × 2.5/2

A = 1250 × 2.5

A = $3125

Answer 2

Answer:

4072

Step-by-step explanation:

I don't have any other loan terms to see, so i will assume that it's over a period of 10 years compounded at interest of 5%. If its not, you can just use the process I use to calculate the other loan terms cost.

So, you plug in the values. We know the final amount, A is equal to the original amount P, 2500, and the time is 10 years.

So A = 2500(1 + 0.05)^10 which equals 4072