Question

total amount = P (1 + i)t

Sara borrowed $500 for four years at 3 percent interest, compounded annually. Use the formula to calculate the total amount she will have paid back.

$515.03
$562.75
$2060

Answer 1

Let A = Total amount
Let i = the interest rate per period
Let t = the # of periods

Our formula:

\[A = (1 + i)^t\]

Answer 2

Sorry, missed P, which is our initial investment.

Revised formula:

\[A = P(1 + i)^t\]