Question

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.

Answer 1

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


P = principal amount (the initial amount you borrow or deposit)

r = annual rate of interest (as a decimal)

t = number of years the amount is deposited or borrowed for.

A = amount of money accumulated after n years, including interest.

n = number of times the interest is compounded per year
For your question
A=?
P=500
T=4
n=1
r=3%

Put the values in equation
A=500(1+3%/1)^4*1
A=500(1+3%)^4
A=500(1.03)^4
A=562.7