SOLUTION: A developer needs $80,000 to buy land. He is able to borrow the money at 7% compounded quarterly. How much interest will be paid on the loan if it is paid off in 5 years? (To the n

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Question 430008: A developer needs $80,000 to buy land. He is able to borrow the money at 7% compounded quarterly. How much interest will be paid on the loan if it is paid off in 5 years? (To the nearest dollar, do not include the $)
Answer by mananth(16946) About Me  (Show Source):
You can put this solution on YOUR website!
Principal P = 80000
Amount= A
years=n 5
compounded 4 times a year
Rate = 7.00 0.02
Amount = P*((n+r)/n)^n

Amount =80000*( 1+0.02)^5*4
Amount =80000*( 1+0.02)^20
80000*(1.02)^20
Amount =113182.26
Interest =113182.26-80000=33,182