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A certain loan program offers an interest rate of 2% compounded continuously. assuming no payments are made how much would be owed six years on a loan of $2300

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raphealnwobi

The amount of money owed on a loan of $2300 for six years is $2590.17

The compound interest on a principal is given by:

[tex]A=P(1+\frac{r}{n} )^{nt}[/tex]

Where A is the final amount, r is the rate, P is the principal, t is the period and n is the number of times compounded in a period.

Given that:

P = 2300, r = 2% = 0.02, n = 1, t = 6 years, hence:

[tex]A=2300(1+\frac{0.02}{1} )^{6*1}\\\\A=2590.17[/tex]

The amount of money owed on a loan of $2300 for six years is $2590.17

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