Because of the compounding effect, a $7,500 loan at 12% interest can grow to $23,293.86 after 10 years.

Question

Quizplus · Accepted Answer

This is true. The formula for compound interest is A=P(1+r/n)^(nt), where A is the ending amount, P is the principal (initial amount), r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years. Plugging in the given values, we get A = 7500(1+0.12/1)^(1x10) = $23,293.86.

Because of the Compounding Effect, a $7,500 Loan at 12