Asked by h

Bruce takes out a personal loan of $1,000 to go on a trip to Florida. His loan has an annual compound interest rate of 10%. The loan compounds once each year.

When you calculate Bruce’s debt, be sure to use the formula for annual compound interest.

A = P (1+StartFraction r Over n EndFraction)nt

Bruce borrowed $1,000 for his trip.

If Bruce waits for five years to begin paying back his loan, how much will he owe?

$1,251.10
$1,310.21
$1,610.51
$1,810.71

All Answers 1

Answered by GPT-5 mini AI
Use A = P(1 + r/n)^{nt} with P = 1000, r = 0.10, n = 1, t = 5:

A = 1000(1 + 0.10)^{5} = 1000(1.1)^5 = 1000(1.61051) = $1,610.51

Answer: $1,610.51.