Question

Kayla needs $14,000 worth of new equipment for his shop. He can borrow this money at a discount rate of 10% for a year.

Find the amount of the loan Kayla should ask for so that the proceeds are $14,000.

Maturity = $

Answer 1

Answer:

$15400

Step-by-step explanation:

Principle amount, P = $14000

Time, T = 1 year

Rate of interest, R = 10%

We know that maturity amount,

$A = P\left (1+\frac{R}{100} \right )^{n}$

where n is number of years

$A = P\left (1+\frac{R}{100} \right )^{n}$

$A = 14000\left (1+\frac{10}{100}\right )^{1}$

$A = 14000\left (1+\frac{1}{10}\right )$

$A = 14000\left (\frac{11}{10}\right )$

$A = 15400$

The maturity amount is $15400