shaimashahin
Answered

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A person borrows $50000 loan from bank at a rate of 10% for 5 years compounded yearly.
a) Calculate the total amount paid after 5 years.
b) Find the interest paid.​

Sagot :

Given:

  • P= $50,000
  • R= 10%
  • T= 5 years

Note that:

  • P= Principal amount
  • R= Rate of interest
  • T= Time period

Solution:

[tex]\large\boxed{Formula: A= P(1+ \frac{R}{100}{)}^{T}}[/tex]

Let's substitute according to the formula.

[tex]A= 50000(1+ \frac{10}{100}{)}^{5}[/tex]

A= $80525.5

Now, we can find the interest paid

[tex]\large\boxed{I= A-P}[/tex]

We'll have to deduct the total amount from the principal amount.

Let's substitute according to the formula.

[tex]I= 80525.5-50000[/tex]

I= $30525.5

Hence, the total amount paid after 5 years is $80525.5 and $30525.5 was paid as interest.

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