Lorenzo took out a loan from a bank at 14% interest compounded annually. After 3 years, the balance on the loan was 8,000.00. How much interest had accumulated on the loan?

Solution

Lorenzo took out a loan from a bank at 14% interest compounded annually. After 3 years, the balance on the loan was 8, 000.00. How much interest had accumulated on the loan?

Solution

Interest : 2600.23

Solution steps

Translate the problem into an equation:

8000 = 5399.77212 \dots + I

Solve for

I, 8000 = 5399.77212 \dots + I : I = 2600.23

Interest : 2600.23

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