Question

Suppose you borrow $500 and you plan to pay it back all at once in 5 years. You are charged 2% interest compounded monthly.

What is the total amount you will need to pay when the loan is due?

Round your answer to the nearest dollar.

$1100?

Answer 1

Good grief NO, that is not even a reasonable guess!

i = .02/12 = .0016666.. (don't round, keep in your calculator)
n = 5(12) = 60

amount = 500(1.0016666..)^60 = .....

Answer 2

so... what is it?

Answer 3

Oh nvm- its $553
k thanks bye ~