Basic College Mathematics (10th Edition)

Published by Pearson
ISBN 10:
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Chapter 6 - Percent - Review Exercises - Page 469: 28

Answer

(a) The compound amount is 179,894.93 dollars. (b) The interest owed is 31,894.93 dollars.

Work Step by Step

(a) To find the compound amount without using the table, multiply the principal amount by 1.05 (105%) four times (once for each year of the loan term). $c=148000\times1.05\times1.05\times1.05\times1.05$= $155,400\times1.05\times1.05\times1.05$= $163,170\times1.05\times1.05$= $171,328.50\times1.05=179,894.93$ (b) The interest owed is the difference between the compound amount and the principal. $179,894.93-148,000=31,894.93$
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