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6 February, 04:50

Jane Smith took out a loan for $40,000 to pay for her child's education. The loan would be repaid at the end of eight years in one payment with interest of 12%. What is the total amount Jane has to pay back at the end of the loan?

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  1. 6 February, 08:18
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    99 038.52 USD

    Step-by-step explanation:

    In order to solve this question we have to use the compound interest formula

    A = P * (1+i) ˆn

    A: final amount including principal

    P: principal amount

    i: interest per year

    n: total number of years

    A = 40000 (1+0.12) ˆ8

    A = 99 038.52 USD
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