Question

Jay decides to take out a $12,000 student loan during his first year in college. If he is charged 4. 5% interest that is compounded annually, how much will the total loan amount equal in four years when he graduates?.

Answer 1

The total loan amount equal in four years when he graduates is $14,310.22.

Using this formula

A=P(1+r)^t

Where:

A= Amount=?

P=Principal=$12,000

r =interest rate=4.5%

t =Time=4 years

Let plug in the formula

Amount=12,000(1+0.045)^4

Amount=12,000(1.045)^4

Amount=12,000(1.1925)

Amount=$14,310.22

Inconclusion the total loan amount equal in four years when he graduates is $14,310.22.

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