A man borrowed $2000 at 0.5% interest compounded annually. If he paid off the loan in full at the end of 6 years, how much did he pay?
A) $2060.76
B) $2060.00
C) $2010.00
D) $60.76

Question

Quizplus · Accepted Answer

The amount paid back on a loan with compound interest is calculated using the formula A = P(1 + r)^n, where A is the amount, P is the principal amount ($2000), r is the annual interest rate (0.5% or 0.005), and n is the number of years (6). Plugging these values in gives A = 2000(1 + 0.005)^6 = $2060.76.

A Man Borrowed $2000 at 0