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
$267,572.61
$4,271.48
$4,562.63
$3,138.08
To calculate the amount to be paid back after three years, we use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = final amount
P = principal (initial loan amount)
r = annual interest rate (as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case:
P = $3,000
r = 0.15 (15% as a decimal)
n = 1 (compounded yearly)
t = 3 years
Plugging these values into the formula, we get:
A = 3000(1 + 0.15/1)^(1*3)
A = 3000(1 + 0.15)^3
A = 3000(1.15)^3
A = 3000(1.520875)
A ≈ 4,562.63
Therefore, the correct answer is $4,562.63.