If a person borrows $3,000 at 8% interest and never makes any payments, how much will the loan balance be after three years?
A) $3,720
B) $3,779.14
C) $3,977.41
D) $7,239.27

Question

Quizplus · Accepted Answer

The correct answer is B: $3,779.14. The formula for calculating the future value of a loan is: FV = PV * (1 + r)^n, where PV is the present value of the loan, r is the annual interest rate, and n is the number of years. In this case, the present value of the loan is $3,000, the annual interest rate is 8%, and the number of years is 3. Plugging these values into the formula, we get: FV = $3,000 * (1 + 0.08)^3 = $3,779.14.

If a Person Borrows $3,000 at 8% Interest and Never