Alisha has a five-year car loan of $15,000 with an interest rate of 6 percent. If the interest is compounded annually, how much will she pay in total for her car?
P = Po(1+r)^n
n = 1comp./yr * 5yrs = 5 compounding
periods.
P = 15000(1.06)^5 = $20,73.38
idk I need the help so y does this not help me at all because I dont know how to answer
To calculate the total amount Alisha will pay for her car, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the total amount Alisha will pay, including both the principal (P) and the interest
P = the principal amount, which is $15,000 in this case
r = the annual interest rate expressed as a decimal, which is 6% or 0.06
n = the number of times the interest is compounded per year, which is 1 (annually)
t = the number of years Alisha will be paying for, which is 5
Now, let's substitute these values into the formula and calculate the total amount Alisha will pay for her car loan:
A = $15,000(1 + 0.06/1)^(1*5)
A = $15,000(1 + 0.06)^5
A = $15,000(1.06)^5
A ≈ $15,000 * 1.338225
A ≈ $20,073.38
Therefore, Alisha will pay a total of approximately $20,073.38 for her car loan.
To calculate how much Alisha will pay in total for her car, we need to determine the total amount including both the principal (loan amount) and the interest.
The formula to calculate the total amount with compound interest is:
A = P * (1 + r/n)^(n*t)
where:
A = the total amount (including principal and interest)
P = principal (loan amount)
r = interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
In this case, Alisha's principal is $15,000, the interest rate is 6% (0.06 in decimal form), the loan term is 5 years, and the interest is compounded annually (n = 1).
Plugging in these values into the formula:
A = 15,000 * (1 + 0.06/1)^(1*5)
= 15,000 * (1.06)^5
Calculating the power of 1.06 to the 5th:
1.06^5 ≈ 1.3382255
A = 15,000 * 1.3382255
≈ $20,073.38
Therefore, Alisha will pay approximately $20,073.38 in total for her car over the course of the five-year loan.