Meredith C.

asked • 07/24/15

Interest Question! Please Help!

A bank charges you 9% interest that is compounded monthly. Use the formula A = P . ( 1 + r/n) nt to find the total amount of interest paid for a 12-year loan of $75,000.00 for your studio.

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Michael J. answered • 07/24/15

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The formula is given to you.
 
A = P(1 + (r/n))nt
 
A = total amount
P = investment
r = interest rate in decimal form
n = the number of times compounded per year
t = time in years
 
 
Given:
P = 75000
r = 0.09
n = 12
t = 12
 
Plug in the values into the formula to find A.
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Andrew M.

Once you find A from the formula you will have the total amount paid back over the 12 years..
($219,962.76)
 
To find the total interest paid you must deduct the original $75,000 from that total
 
Interest = A - P = $144,962.76
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07/24/15

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