how would you do compound intrest on this problem You borrowed $10,400 for 4 years at 12.7 % and the interest is compounded semi- annually. What is the total you will pay back?
+130511 Interest = P(1 + r/n)nt - P
Where P is the amount borrowed, $10,400 .......r is the annual interest rate (we must divide this by 2 because the interest is being compounded semi-annually...12.7% / 2 = 6.35% = .0635 ......n is the number of compoundings per year = 2, and t is the number of years = 4......so we have
I = 10400(1 + .0635)2*4 - 10400 =
I = 10400(1.0635)8 - 10400 = $6618.97
+130511 Interest = P(1 + r/n)nt - P
Where P is the amount borrowed, $10,400 .......r is the annual interest rate (we must divide this by 2 because the interest is being compounded semi-annually...12.7% / 2 = 6.35% = .0635 ......n is the number of compoundings per year = 2, and t is the number of years = 4......so we have
I = 10400(1 + .0635)2*4 - 10400 =
I = 10400(1.0635)8 - 10400 = $6618.97
