Jill Ley took out a loan to pay for her child's education for $60,000 the loan wouls be repaid at the end of 8 years in one payment with an interest of 6 percent the total amount Jill has to pay back at the end of the loan is.
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To calculate the total amount Jill has to pay back at the end of the loan, we need to find the interest amount and add it to the principal amount.
The formula to calculate the interest is:
Interest = Principal × Rate × Time
Principal: $60,000
Rate: 6% (0.06 as a decimal)
Time: 8 years
Interest = $60,000 × 0.06 × 8
Interest = $28,800
Now, to find the total amount Jill has to pay back, we add the principal and the interest:
Total amount = Principal + Interest
Total amount = $60,000 + $28,800
Total amount = $88,800
Therefore, Jill has to pay back a total of $88,800 at the end of the loan.
To calculate the total amount Jill has to pay back at the end of the loan with interest, we need to use the formula for calculating compound interest:
Amount = Principal * (1 + Interest Rate/100)^Time
In this case:
Principal = $60,000
Interest Rate = 6%
Time = 8 years
Plug these values into the formula and calculate:
Amount = $60,000 * (1 + 6/100)^8
Now, let's break down the calculation step by step:
1. Convert the interest rate to a decimal by dividing by 100:
Interest Rate = 6/100 = 0.06
2. Add 1 to the interest rate:
1 + 0.06 = 1.06
3. Raise this result to the power of the time period:
(1.06)^8 = 1.593848
4. Multiply the principal amount by the calculated result to get the total amount:
Amount = $60,000 * 1.593848 = $95,630.88
So, Jill would have to pay back a total amount of approximately $95,630.88 at the end of the 8-year loan period.