Find the common ratio r for the given infinite geometric sequence.
-A woman borrowed $10,000 at 6% interest compounded annually. If the loan was paid off in one lump sum at the end of 4 years, how much did she pay?
A) $10,600.00
B) $12,624.77
C) $2624.77
D) $12,400.00

Question

Quizplus · Accepted Answer

The common ratio r in this context refers to the growth factor of the loan due to interest, which is 1 + 0.06 = 1.06 for a 6% annual interest rate. However, the question actually asks for the final amount paid after 4 years, not the common ratio. The formula for compound interest is A = P(1 + r)^n, where A is the amount, P is the principal amount ($10,000), r is the annual interest rate (0.06), and n is the number of years (4). Plugging these values in gives A = $10,000(1 + 0.06)^4 = $12,624.77.

Find the Common Ratio R for the Given Infinite Geometric