Answer:
The balanced amount is $3130.25.
Step-by-step explanation:
Given : Lily provider a loan of $2500 to David that had an annual interest rate of 4.6%.
To find : The balance after 5 years if it compounded yearly ?
Solution :
Using compound interest formula,
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
Where, P=$2500 is the principal
r=4.6%=0.046 is the interest rate
t=5 years
Substitute the values,
[tex]A=2500(1+\frac{0.046}{1})^{5\times 1}[/tex]
[tex]A=2500(1.046)^{5}[/tex]
[tex]A=2500\times 1.2521[/tex]
[tex]A=3130.25[/tex]
Therefore, the balanced amount is $3130.25.
