Question 756248
assuming there are 365 days in a year, the daily interest rate is equal to .12 divided by 365 which is equal to .000328767 per day.


the number of time periods is equal to 365 * 7 which is equal to 2555.


add 1 to the interest rate per day and raise that to the power of 2555 to get:


1.000328767 ^ 2555 = 2.316047218


multiply 5000 by 2.31..... to get 11580.23609


at the end of 7 years, she will have to pay the dealer $11,580.24.


with no payments, this is a future value of a present amount formula which is:


f = p * (1 + i/c) ^ (y * c)


f = future value
p = present amount
i = annual interest rate (apr)
c = number of compounding periods per year.
y = number of years


based on your information and assuming 365 days per year, the formula becomes:


f = 5000 * (1 + (.12/365)) ^ (7*365)


that becomes:


f = 5000 * 1.000328767 ^ 2555


use your calculator to get:


f = 11580.23609