Solve the problem.
-A small company borrows $30,000 at 4% compounded monthly. The loan is due in 6 years. How Much interest will the company pay?
A) $7995.60
B) $8092.04
C) $8122.26
D) $38,122.26

Question

Quizplus · Accepted Answer

The interest paid can be calculated using the formula for compound interest: A = P(1 + r/n)^(nt), where A is the amount on maturity, P is the principal amount ($30,000), r is the annual interest rate (4% or 0.04), n is the number of times the interest is compounded per year (12, since it's compounded monthly), and t is the time the money is borrowed for in years (6). First, calculate the amount on maturity: A = 30000(1 + 0.04/12)^(12*6) = $38,122.26. The interest paid is then A - P = $38,122.26 - $30,000 = $8,122.26.

Solve the Problem. -A Small Company Borrows $30,000 at 4% Compounded Monthly. the Compounded