This is the formula for compound interest on a fixed deposit.
It is not the formula for loan amortization, which takes into account the declining balance.
Better check you formula list.
However, if that's the formula you were supposed to use, you did it right.
Tommy owes 3000 on his credit card. He is paying 14.5% interest compounded monthly. If it takes him 4 years to pay off the balance, what was the total amount that he ended up paying.
Okay, so it gives me the equation a=p(1+r/n)^nt
I did 3000(1+.145/12)^48 and got $5339.52
Is this correct?
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It is the formula my teacher gave me so I suppose that's what I'm supposed to do. Thank you.
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