SOLUTION: Mr. Obama borrows money at 6% compound monthly . Two years later, he pays off the loan with a single payment of $5000. How much did he borrow?

Question 237359: Mr. Obama borrows money at 6% compound monthly . Two years later, he pays off the loan with a single payment of $5000. How much did he borrow?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Mr. Obama borrows money at 6% compound monthly . Two years later, he pays off the loan with a single payment of $5000. How much did he borrow?
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A(t) = P(1+(r/n))^(nt)
5000 = P(1+0.06/12)^(12*2
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5000 = P(1.005)^24
P = 5000/1.12716
P = $4435.93 is the amount he borrowed.
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Cheers,
Stan H.
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