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Susan loaned Adam $16,580 at an interest rate of 6% for 4 years. How much will Adam pay Susan at the end of 4 years? Round your answer to the nearest cent, if necessary.

Answer: $______


Sagot :

To find out how much Adam will pay Susan at the end of 4 years, we need to calculate both the interest accrued and the total amount to be paid back.

Here is the step-by-step solution:

1. Identify the principal amount (P):
The principal amount, or the initial loan amount, is $16,580.

2. Determine the annual interest rate (r):
The interest rate is given as 6%, which can be written in decimal form as 0.06.

3. Establish the time period (t):
The loan period is 4 years.

4. Calculate the interest accrued (I) over the loan period:
The formula to calculate the simple interest is:
[tex]\[ I = P \times r \times t \][/tex]
Plugging in the values, we get:
[tex]\[ I = 16580 \times 0.06 \times 4 = 3979.2 \][/tex]
So, the interest accrued over 4 years is $3,979.20.

5. Calculate the total amount to be paid (A):
To find the total amount to be paid at the end of the loan period, we add the interest to the principal amount:
[tex]\[ A = P + I \][/tex]
Combining the principal and the interest, we get:
[tex]\[ A = 16580 + 3979.2 = 20559.2 \][/tex]
So, the total amount Adam will pay Susan at the end of 4 years is $20,559.20.

Hence, after 4 years, Adam will pay Susan $20,559.20.
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