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An amount of 25,000 is borrow for 15 years at 5.5% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be paid back?

Respuesta :

Answer: [tex]55,811.91[/tex]

Step-by-step explanation:

Given

Principal amount is 25,000

Time Period is [tex]t=15\ yr[/tex]

Rate of interest [tex]r=5.5\%[/tex]

Amount in compound interest is given by

[tex]\Rightarrow A=P\left(1+r\%\right)^t[/tex]

Insert the values

[tex]\Rightarrow A=25,000(1+\dfrac{5.5}{100})^{15}\\\\\Rightarrow A=25,000(1.055)^{15}\\\Rightarrow A=55,811.91[/tex]

Therefore, [tex]55,811.91[/tex] must be paid back

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