Question #138150

For an interest rate of 13 percent compounded annually, how much will be required in

four years to repay a $25,000 loan received now?

four years to repay a $25,000 loan received now?

Expert's answer

Principal, "P=\\$25,000"

"Rate, r= 13\\%"

"Time, t=4years"

"n=" 1 compounded annually

Amount to be paid in four years (compounded annually) will be

"A=P(1+\\frac{r}{n})^{nt}=25,000" "(1+\\frac{13}{100\\times1})^{(1)(4)}"

"=25,000(1+0.13)^{4}=25,000(1.13)^{4}=\\$40761.84"

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