find total amount due on loan,round to nearest cent.$600 = principal Rate=2% time in Years=2 show steps to solve and answer
To find the total amount due on a loan, you will need to use the formula for calculating compound interest. The formula is:
Total Amount = Principal * (1 + Rate)^Time
Let's break down the steps to solve this problem:
Step 1: Convert the rate to its decimal form.
The rate is given as 2%, which needs to be expressed as a decimal. To do this, divide the rate by 100:
Rate = 2% / 100 = 0.02
Step 2: Substitute the values into the formula.
Principal = $600
Rate = 0.02
Time = 2 years
Total Amount = $600 * (1 + 0.02)^2
Step 3: Calculate the compound interest.
Using an exponent calculator or the exponent rules, you can calculate (1 + 0.02)^2 as follows:
(1 + 0.02)^2 = 1.0404
Total Amount = $600 * 1.0404
Step 4: Round the total amount to the nearest cent.
Multiply the calculated total amount by 100 to move the decimal point two places to the right:
Total Amount = $600 * 1.0404 = $624.24
Rounded to the nearest cent, the total amount due on the loan is $624.24.