Rachel borrowed 8000 at a rate of 10.5%, compounded monthly. Assuming she makes no payments, how much will she owe after 4 years?
Convert annual amounts to monthly
4 years = 12 * 4 = 48 months
i = .105/12 = 0.00875 monthly
Build our accumulation function A(t) where t is the time in months
A(48) = 8,000 * (1.00875)^48
A(48) = 8,000 * 1.5192
A(48) = 12,153.60
You can also use the balance calculator
Convert annual amounts to monthly
4 years = 12 * 4 = 48 months
i = .105/12 = 0.00875 monthly
Build our accumulation function A(t) where t is the time in months
A(48) = 8,000 * (1.00875)^48
A(48) = 8,000 * 1.5192
A(48) = 12,153.60
You can also use the balance calculator
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