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5. Assume you borrow $5,000 today and pay back the loan in one lump sum four years from today. You are charged 8 percent interest per year. What amount will you pay back and how much interest will you pay?

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P = Po + Po*r*t = 5000 + 5000*0.08*4 =
5000 + 1600 = $6600 = Amt. paid.

Int. = $1600

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