For a 7-day Hawaii vacation, Beth borrowed $2,310 for 7 months at an annual rate of 11.1%, compounded monthly.What did she owe?
A)$5,021.40
B)$2,463.79
C)$2,920.69
D)$2,510.70
E)$3,319.98

Question

Quizplus · Accepted Answer

First, we need to calculate the monthly interest rate:

11.1% / 12 months = 0.925% per month

Next, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

where:

A = amount owed
P = principal (amount borrowed)
r = annual interest rate (as a decimal)
n = number of times the interest compounds per year
t = time (in years)

Plugging in our numbers, we get:

A = 2310(1 + 0.00925)^(7*12)
A = 2310(1.00925)^84
A = $2,463.79

Therefore, Beth owed $2,463.79 after 7 months of borrowing $2,310 for her Hawaii vacation.

For a 7-Day Hawaii Vacation, Beth Borrowed $2,310 for 7