SOLUTION: Suppose you borrow $500 from a bank that charges 14.5% interest compounded annually. What is the balance you owe after 4 years? Thanks so much for all the help! -Jasmine

Algebra ->  Finance -> SOLUTION: Suppose you borrow $500 from a bank that charges 14.5% interest compounded annually. What is the balance you owe after 4 years? Thanks so much for all the help! -Jasmine      Log On


   

Question 119519: Suppose you borrow $500 from a bank that charges 14.5% interest compounded annually. What is the balance you owe after 4 years? Thanks so much for all the help! -Jasmine
Answer by Fombitz(32388) About Me  (Show Source):
You can put this solution on YOUR website!
FV=P%281%2BR%29%5ET
where FV is the Future value, P is today's value, R is the interest rate, and T is the compounding time period.
P=$500
R=14.5%
T=4 years (compounded annually)
FV=500%281%2B.145%29%5E5
FV=500%281.968%29
FV=984
You would owe $984.00.