Math question

Question

Jamie borrowed money at 9.6% per, compounded quarterly after three years she paid $4519.38 to clear off the loan. what is the amount of the loan 

Answer 1

Compound interest:

 

A = P(1+r/n)^nt

A = future or final value = 4519.38

P = Principal investment or loan amount

r = interest rate as a decimal = .096

n = # times compounded per year = 4

t = time in years = 3

 

4519.38 = P(1+.096/4)⁴⁽³⁾

 

P = 4519.38/1.024¹²

P =$3400

 

The initial loan was $3,400

Answer 2

Let me loan principal amount be P.

4519.38 = P (1 + 9.6/400)¹²

⇒ P = 3400