To calculate the amount to be paid back on a loan with interest compounded yearly, you can use the formula for compound interest:
\[ A = P (1 + r)^n \]
Where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount (the initial loan amount).
- \( r \) is the annual interest rate (decimal).
- \( n \) is the number of years the money is borrowed for.
Given:
- \( P = 20,000 \)
- \( r = 12% = 0.12 \)
- \( n = 5 \)
Now plug the values into the formula:
\[ A = 20,000 (1 + 0.12)^5 \] \[ A = 20,000 (1.12)^5 \] \[ A = 20,000 (1.7616) \quad (\text{using } (1.12)^5 \approx 1.7623) \] \[ A \approx 20,000 \times 1.7623 \approx 35,246.3 \]
So the total amount to be paid back after five years is approximately $35,246.83.
Therefore, the correct response is: $35,246.83.