SOLUTION: i need ur help, cause i think its so confused You borrow money from a bank to build a house. The Bank applies the compound interest formula A = P (1 + r / n) ^ nt. If you borrow m

Algebra ->  Human-and-algebraic-language -> SOLUTION: i need ur help, cause i think its so confused You borrow money from a bank to build a house. The Bank applies the compound interest formula A = P (1 + r / n) ^ nt. If you borrow m      Log On


   

Question 896449: i need ur help, cause i think its so confused
You borrow money from a bank to build a house. The Bank applies the compound interest formula A = P (1 + r / n) ^ nt. If you borrow money as much as 300 million dollars and you will pay in total after 10 years at 8% (0.08). What is the total amount you borrowed money?
Answer by ankor@dixie-net.com(22740) About Me  (Show Source):
You can put this solution on YOUR website!
You borrow money from a bank to build a house.
The Bank applies the compound interest formula A = P (1 + r / n) ^ nt.
If you borrow money as much as 300 million dollars and you will pay in total after 10 years at 8% (0.08).
What is the total amount you borrowed money?
:
If I understand this correctly, You borrowed 300 million, What was the total amt you owe after 10 yrs. And the interest was compounded monthly
P%281%2B%28r%2Fn%29%29%5E%28nt%29+=+A; where
P = amt of the loan (300 million)
r = .08
n = 12 payments per year
t = 10 yrs
A = total amt paid in (millions of dollars)
:
A = 300%281+%2B+%28.08%2F12%29%29%5E%2812%2A10%29
A = 300%281.0067%29%5E120
use a calc
A = 300 * 2.22
A = 666 million, total amt paid
:
There is no mention of monthly payment, this would require a different formula.
The monthly payment for 300 million can be calculated to be 3.64 million per month to pay the loan off in 10 yrs, Then the total you paid would be 3.64 * 120 = 4.37 million