suppose that $2000 is loaned at a rate of 18%, compounded monthly. Assuming that no payments are made, find the amount owed after 10 years. PLEASE HELP!!!!

Question

ganeshie8 · Answer

its a straight forward problem. just plugin the numbers in  "compound interest formula". may i know what exactly you need help wid  ?

ganeshie8 · Answer

$\huge FV = P(1 + \frac{r}{n})^{n*t}$

FV : Final Value of money
P : Principal (initial money)
r : rate of interest per year
n : compounding period
t : time in years

ganeshie8 · Answer

can you try plugin the given info in above formula and simplifying...  .

anonymous · Answer

wht is compounded monthly mean?

ganeshie8 · Answer

it means, interest is calculated on loan every month. 
which means, 12 times a year each time at a rate of (r/12)

ganeshie8 · Answer

here, r = 18 %

anonymous · Answer

it means 1.5

ganeshie8 · Answer

thats right!
it comes to 1.5 % every month. 

since there are 10 years, you have to compound this for 12*10 = 120 periods.

anonymous · Answer

u gave r and t as compounding pereid nd time r they mean same

ganeshie8 · Answer

nope. they are different.
t = time is in years. (here t = 10 years)
n = compoinding period, it refers to how many times you calculate interest in a year (here n = 12)

anonymous · Answer

kkk

ganeshie8 · Answer

all these are taken care by above formula, @emilybeth123  you plugin the numbers in the formula, you will be fine...