Problema Solution
Trey is buying a new quad. Trey borrows $10,000 for 5 years at 8% annual interest. How much interest will Trey pay?
Answer provided by our tutors
The future value FV of a present amount PV can be expressed as:
FV = PV x (1.00 + i)^n
PV = $10,000
n = 5 years
i = 8% = 8/100 = 0.08
FV = 10000(1 + 0.08)^5
FV = $14,693.3
the interest is FV - PV = 14,693.3 - 10,000.0 = $4,693.3
after 5 years Trey will pay $4,693.3 interest.