Question

If you borrowed $15000 to buy a new car at 6 % interest per year, compounded annually, and paid back the principal and interest at the end of 8 years, how much would you pay back

Answer 1

do you know the formula for compound interest?

Answer 2

is it A= P(1+r/n)^nt?

Answer 3

and how many times is it compounded per year?

Answer 4

annually so wouldnt that be once

Answer 5

how many compounds per year then?

Answer 6

ok so n = 1 r = 6% = 0.06, P =15000 , t = 8 years
All you need to do is substitute these values in the equation above to get the total after 8 years.

Answer 7

ok thanks ill try it out

Answer 8

great!

Answer 9

i got 23907.72

Answer 10

nice!