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Huy borrowed $4500 from a bank at a rate of 5% per year compound interest. He paid back the money and interest at the end of 2 years.
How much interest did he pay?

Respuesta :

Answer:

Step-by-step explanation:

FV = PV ( 1 + i)^n       i = decimal interest per period(year)   n = periods(years)

                   FV = future value   PV = present value (deposit or loan amount)

FV = 4500 ( 1 + .05)^2

FV = 4500(1.05)^2 = 4961.25    subtract the orginal deposit  which means 461.25 interest paid at 2 yrs

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