Question

Amy is charged 12% annual interest compounded monthly on the unpaid balance of a $2000 loan. She did not make any payments for 2 years. Her friend said the amount she owed had more than doubled, is that true? how much does she owe?

Answer 1

value of debt after 2 years
= 2000(1.12)^2 = 2508.80

What should be tell her friend?