If you borrow $10,000 over five years, at the end of the five years, what will you have paid?(1 point) Responses $10,000 $10,000 $2,000 $2,000 more than $10,000 more than $10,000 less than $2,000
To determine how much you will have paid at the end of five years, you need to consider the interest rate on the borrowed amount. Without this information, it is not possible to give an exact answer.
To determine what you will have paid at the end of five years when borrowing $10,000, you need to consider the interest and any other fees associated with the loan. Assuming a simple interest rate and no additional fees, the total amount you will have paid back will be the sum of the principal amount borrowed and the interest accrued over the five-year period.
If we assume an interest rate of 5% per year, the calculation would be as follows:
Principal amount borrowed: $10,000
Interest rate per year: 5%
Loan term: 5 years
To calculate the interest accrued, you can use the formula:
Interest = Principal amount × Interest rate × Time
Interest accrued = $10,000 × 0.05 × 5 = $2,500
Therefore, the total amount you will have paid at the end of the five years would be the sum of the principal amount borrowed and the interest accrued:
Total amount paid = Principal amount + Interest accrued
Total amount paid = $10,000 + $2,500 = $12,500
So, you will have paid more than $10,000 at the end of the five years.
To calculate what you will have paid at the end of the five years when borrowing $10,000, you need to consider the interest rate and the terms of the loan. The additional information is required to accurately determine the total amount to be paid.
The interest rate represents the cost of borrowing money and is usually expressed as an annual percentage rate (APR). Assuming a fixed interest rate, you also need to know whether the interest is simple or compound interest.
If you know the interest rate, you can use a loan calculator or a financial formula to determine the total amount to be paid. Here's an example using simple interest:
1. Calculate the annual interest amount: Multiply the initial loan amount ($10,000) by the annual interest rate (e.g., 5%).
For example: $10,000 * 0.05 = $500
2. Multiply the annual interest amount by the number of years (in this case, five) to find the total interest paid over the loan term.
For example: $500 * 5 = $2,500
3. Add the total interest paid to the initial loan amount to find the total amount to be paid:
For example: $10,000 + $2,500 = $12,500
Therefore, if the interest rate is simple (meaning no compounding) and the interest rate provided is correct for the five-year term, you will have paid $12,500 at the end of the five years.
Keep in mind that if the interest rate is compound instead of simple, or if there are any additional fees or charges associated with the loan, the total amount paid could be different.