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)
$4,271.48
$4,562.63
$267,572.61
$3,138.08
To calculate the amount to be paid back after three years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = Amount to be paid back
P = Principal amount (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, the principal amount (P) is $3,000, the interest rate (r) is 15% (or 0.15 as a decimal), the interest is compounded yearly (n = 1), and the number of years (t) is 3.
Plugging these values into the formula:
A = 3000(1 + 0.15/1)^(1*3)
= 3000(1 + 0.15)^3
= 3000(1.15)^3
= 3000(1.15^3)
≈ 3000 * 1.520875
≈ $4,562.63
Therefore, the amount to be paid back after three years is approximately $4,562.63.