background info: tom finds a second personal loan option. this loan would also require him to repay the…

background info: tom finds a second personal loan option. this loan would also require him to repay the principal in one lump sum after three years. loan option b principal: $9,000 type of interest: compound interest interest rate: 8% rate of accrual: once per year use the formula for annual compound interest. $a = p(1+\frac{r}{n})^{nt}$ remember, a refers to the total amount owed. calculate the total amount that tom would repay. $10,337 $11,337 $12,337 $13,337

background info: tom finds a second personal loan option. this loan would also require him to repay the principal in one lump sum after three years. loan option b principal: $9,000 type of interest: compound interest interest rate: 8% rate of accrual: once per year use the formula for annual compound interest. $a = p(1+\frac{r}{n})^{nt}$ remember, a refers to the total amount owed. calculate the total amount that tom would repay. $10,337 $11,337 $12,337 $13,337

Answer

Explanation:

Step1: Identify values

$P = 9000$, $r=0.08$, $n = 1$, $t = 3$

Step2: Substitute into formula

$A=P(1 +\frac{r}{n})^{nt}=9000(1+\frac{0.08}{1})^{1\times3}$

Step3: Calculate inside the parentheses first

$1+\frac{0.08}{1}=1 + 0.08=1.08$

Step4: Calculate the exponent

$(1.08)^{3}=1.08\times1.08\times1.08 = 1.259712$

Step5: Multiply by principal

$A=9000\times1.259712 = 11337.408\approx11337$

Answer:

$11,337$