Calculate the amount to be paid back after three years on a $3,000 credit card loan with an interest rate of 15% compounded yearly. (1 point)
Responses
$4,271.48
$4,271.48
$3,138.08
$3,138.08
$4,562.63
$4,562.63
$267,572.61
To calculate the amount to be paid back after three years on a $3,000 credit card loan with an interest rate of 15% compounded yearly, we can use the formula for compound interest:
A = P(1+r/n)^(n*t)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (initial loan amount)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years
In this case, the initial loan amount is $3,000, the interest rate is 15% (or 0.15 as a decimal), the loan is compounded yearly (n = 1), and the loan duration is three years (t = 3).
Plugging these values into the formula:
A = 3000(1+0.15/1)^(1*3)
= 3000(1.15)^3
≈ 3000(1.520875)
≈ $4,562.63
Therefore, the correct answer is $4,562.63.