annual interest rate for a period of 3 years. The loan amount was $10,000.
To calculate the total amount Mr.Jones will have to repay at the end of 3 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the loan
P = the principal amount (loan amount) = $10,000
r = annual interest rate = 11.25% = 0.1125
n = number of compounding periods per year = 1 (since it is compounded annually)
t = number of years = 3
Plugging in the values, we get:
A = 10,000(1 + 0.1125/1)^(1*3)
A = 10,000(1 + 0.1125)^3
A = 10,000(1.1125)^3
A = 10,000(1.361644)
A = 13,616.44
Therefore, Mr. Jones will have to repay a total of $13,616.44 at the end of 3 years.
Mr.Jones took a loan from the bank at 11.25%
1 answer
1 answer