Asked by Garrett Spain on May 19, 2024
Verified
Marie Chaney borrowed $12,580 from her mother for 4 years at 5% compounded annually. How much interest will Marie have to pay to her mother? (Use Tables 16-1A&B or a calculator.)
Compounded Annually
A system of calculating interest where the accumulated interest is added to the principal at the end of each year, resulting in interest earning interest in subsequent periods.
- Seize the understanding of compound interest along with its calculation process.
- Amplify your skills in operating financial tables and calculators for the calculation of future values and compound interest.
- Cultivate the capability to determine interest charges on loans.
Verified Answer
NC
Nancy corporanMay 25, 2024
Final Answer :
0.05 ¸ 1 = 0.05; 1 ´ 4 = 4; $12,580 ´ 1.21551 = $15,291.12;
$15,291.12 - $12,580 = $2,711.12 interest
$15,291.12 - $12,580 = $2,711.12 interest
Learning Objectives
- Seize the understanding of compound interest along with its calculation process.
- Amplify your skills in operating financial tables and calculators for the calculation of future values and compound interest.
- Cultivate the capability to determine interest charges on loans.
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