Respuesta :
Using compound interest, it is found that:
a) He will have paid $18,774 in total.
b) He paid $4,774 more than the price of the car.
What is compound interest?
The amount of money earned, in compound interest, after t years, is given by:
[tex]A(t) = P\left(1 + \frac{r}{n}\right)^{nt}[/tex]
In which:
- A(t) is the amount of money after t years.
- P is the principal(the initial sum of money).
- r is the interest rate(as a decimal value).
- n is the number of times that interest is compounded per year.
- t is the time in years for which the money is invested or borrowed.
In this problem, the parameters are:
[tex]P = 14000, r = 0.049, n = 12, t = \frac{72}{12} = 6[/tex].
Item a:
[tex]A(t) = P\left(1 + \frac{r}{n}\right)^{nt}[/tex]
[tex]A(6) = 14000\left(1 + \frac{0.049}{12}\right)^{12 \times 6}[/tex]
[tex]A(6) = 18774[/tex]
He will have paid $18,774 in total.
Item b:
18774 - 14000 = $4,774.
He paid $4,774 more than the price of the car.
More can be learned about compound interest at https://brainly.com/question/25781328
