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Popular Word Problems >

Christopher took out a loan for \$25,690 to purchase a truck. With an annual interest rate of 5.2%, how much would he have paid after 5 years if the interest was compounded monthly?

Solution

C h r i s t o p h er t oo k o u t a l o an f or $25, 690 t o p u rc ha se a t r u c k . Wi t h an ann u a l in t eres t r a t e o f 5.2%, h o w m u c h w o u l d h e ha v e p ai d a f t er 5 ye a rs i f t h e in t eres t w a s co m p o u n d e d m o n t h l y ?

Solution

Amount : 33299.42

Solution steps

Translate the problem into an equation:

A = 25690 (1 + \frac{0.052}{12})^{12 \cdot 5}

25690 (1 + \frac{0.052}{12})^{12 \cdot 5} = 33299.42401 \dots

Round to the nearest hundredth:

33299.42

Amount : 33299.42

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