An amount of

$34,000 is borrowed for 13 years at 6.25% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be paid back?

Question

An amount of 



$34,000 is borrowed for 13 years at 6.25% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be paid back?

anonymous · Answer

@jackthegreatest

solomonzelman · Answer

the formula for compound interest is:

$\LARGE\color{blue}{ A=P\left(\begin{matrix} 1+\frac{\LARGE  r}{\LARGE n}  \ \end{matrix}\right)^{n~\times~t}  }$ 

where:
$\LARGE\color{blue}{ A}$  is the value you get in the future:

$\LARGE\color{blue}{ P  }$   is the initial investment (or amount)

$\LARGE\color{blue}{ r  }$   is a percent rate (in decimal).

$\LARGE\color{blue}{ n }$    is the number of times the interest is compound each year.

$\LARGE\color{blue}{ t }$       is the number of years

solomonzelman · Answer

in your case:

$\LARGE\color{green}{ A}$  is what you want to find

$\LARGE\color{blue}{ P  }$   is 34,000

$\LARGE\color{blue}{ r  }$   is 0.0625     (converted the % by dividing by 100)

$\LARGE\color{blue}{ n }$   is 1. (because it is compounded annually, as the problem tells you)

$\LARGE\color{blue}{ t }$       is 13   (it is given to be so).

solomonzelman · Answer

$\LARGE\color{blue}{ A=34,000\left(\begin{matrix} 1+\frac{\LARGE  0.0625}{\LARGE 1}  \ \end{matrix}\right)^{1~\times~13}  }$        I plugged
                                                                                    the numbers
                                                                                    for you and 
leaving it for you to calculate. good luck!