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Charlie borrowed $125,000 for his small business
at a rate of 3.9% compounded annually for
30 years. At the end of the loan, how much will
he have actually paid for the loan?

A. $146,250
B. $271,250
C. $389,625.25
D. $393,891.35

Sagot :

[tex]~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$125000\\ r=rate\to 3.9\%\to \frac{3.9}{100}\dotfill &0.039\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{annually, thus once} \end{array}\dotfill &1\\ t=years\dotfill &30 \end{cases} \\\\\\ A=125000\left(1+\frac{0.039}{1}\right)^{1\cdot 30}\implies A=125000(1.039)^{30}\implies A\approx 393891.35[/tex]

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