Christopher took out a loan for \$25,690 to purchase a truck. With an annual interest rate of 5.2%, how much would he have paid after 5 years if the interest was compounded monthly?

Solution

Christopher took out a loan for $25, 690 to purchase a truck. With an annual interest rate of 5.2%, how much would he have paid after 5 years if the interest was compounded monthly?

Solution

Amount : 33299.42

Solution steps

Translate the problem into an equation:

A = 25690 (1 + \frac{0.052}{12})^{12 \cdot 5}

25690 (1 + \frac{0.052}{12})^{12 \cdot 5} = 33299.42401 \dots

Round to the nearest hundredth:

33299.42

Amount : 33299.42

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