A man borrowed $3000 at 10% interest compounded annually. If he paid off the loan in full at the end of 4 years, how much did he pay? Round your answer to the nearest cent.
A) $4200.00
B) $4392.30
C) $3300.00
D) $1392.30

Question

Quizplus · Accepted Answer

The amount paid back on a loan with compound interest is calculated using the formula A = P(1 + r)^n, where A is the amount, P is the principal amount ($3000), r is the annual interest rate (10% or 0.10), and n is the number of years (4). Plugging these values in gives A = 3000(1 + 0.10)^4 = $4392.30.

A Man Borrowed $3000 at 10% Interest Compounded Annually