A woman borrowed $30,000 at 8% interest compounded annually. If the loan was paid off at the end of 5 years, how much did she pay? Round your answer to the nearest cent.
A) $14,079.84
B) $32,400.00
C) $44,079.84
D) $42,000.00

Question

Quizplus · Accepted Answer

The amount paid off at the end of 5 years can be calculated using the formula for compound interest: A = P(1 + r)^n, where A is the amount, P is the principal amount ($30,000), r is the annual interest rate (8% or 0.08), and n is the number of years (5). Plugging in the values: A = $30,000(1 + 0.08)^5 = $44,079.84.

A Woman Borrowed $30,000 at 8% Interest Compounded Annually