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 $4,562.63 $4,562.63
The amount to be paid back after three years can be calculated using the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount to be paid back
P = the initial principal (loan amount)
r = the annual interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years
In this case, P = $3,000, r = 0.15, n = 1 (compounded yearly), and t = 3. Plugging in these values into the formula:
A = 3000(1 + 0.15/1)^(1*3)
A = 3000(1 + 0.15)^3
A = 3000(1.15)^3
A ≈ $4562.63
Therefore, the amount to be paid back after three years on a $3,000 credit card loan with an interest rate of 15% compounded yearly is approximately $4,562.63.