John wants to open a showroom for that he borrows $48,000 on 12% interest rate. He plans to pay this after 4 years. What will that total principal + Interest payment be?

1 Answer
Jan 25, 2018

Answer:

Amount to be paid by Jhon at the end of four years is

#color(blue)(A = $ 75,528.93)# (corrected to two decimals)

Explanation:

Interest compounded annually.

Formula for compound interest annually is

#A = P (1 + (r/100))^n# where

P = $48,000, r = 13%, n = 4 years.

To find A.

#A = 48000 * (1 + (12/100))^4#

#A = 48000 * (112/100)^4 = 48000 * (1.12)^4#

Amount to be paid by Jhon at the end of four years is

#color(blue)(A = $ 75,528.93)# corrected to two decimals)