An amount of $49,000 is borrowed for 7 years at 6% interest, compounded annually. If the loan is paid in full at the end of that period, how much must be paid back?

69580

Step-by-step explanation:

Step-by-step explanation:

Hmm. 45 thousand dollars at 4.5 percent compounded annually for 13 years?

After one year the loan would accrue 4.5% interest, which is 0.045 times $45,000 dollars. Added to the base ($45000) this is (1 + 0.045)* $45,000, or $47,025. (Just over two thousand dollars interest.)

After two years we do this again with the new base, so it is $47,025 times (1.045), or $45,000 times (1.045) times (1.045) which can be written:

45000(1.045)2=49141.125  dollars.

You can see where this is going, I hope. After the thirteenth year we get:

45000(1.045)13≏79,748.8243759089  dollars.

So the answer to your question is $79,749, to the nearest dollar.

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