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1 September, 16:26

Suppose that Betty takes out a loan for $300 at an annually compounded interest rate of 6 percent to be repaid after five years. How much will be required to pay off the loan at the end of the five years?

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  1. 1 September, 17:59
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    Betty required to $401

    Explanation:

    Using the future value formula

    FV = PV x (1+r) ^ n

    FV = $300 x (1+6%) ^5

    FV = $401

    Betty required to Pay $401 at maturity of loan.
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