Answered

Get the information you need from a community of experts on IDNLearn.com. Find the answers you need quickly and accurately with help from our knowledgeable and experienced experts.

. mervin needs cash and he needs it now. he goes to advanced financial and takes out a loan of 300.00. advanced financial calls their loans mirco-loans and get to choose their own interest rates. if they set the rate at 70% per year, how much interest will mervin need to pay back in 5 months if interest compounds monthly? how much will he owe in 5 months using approximate equivalent growth?

Sagot :

MrRoyalidn

Mervin's loan of $300 is an illustration of compound interest

The interest to pay back in 5 months is $74.2, and the amount to pay back in 5 months is $374.2

The interest to pay back in 5 months

The given parameters are:

  • Principal, P =$300.00
  • Rate, r = 70%
  • Time, t = 5 months

The compound interest is calculated as:

CI = P * (1 + r)^(t/12) - P

Substitute known values

CI = 300 * (1 + (0.70))^(5/12) - 300

Evaluate the expression

CI = 74.2

Hence, the interest to pay back in 5 months is $74.2

The amount to pay back in 5 months

The amount (A) is calculated using:

A = CI + P

This gives

A = 74.2 + 300

A = 374.2

Hence, the amount to pay back in 5 months is $374.2

Read more about compound interest at:

https://brainly.com/question/24924853

We value your participation in this forum. Keep exploring, asking questions, and sharing your insights with the community. Together, we can find the best solutions. Your questions deserve accurate answers. Thank you for visiting IDNLearn.com, and see you again for more solutions.