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Simple and Compound Interests
A manufacturer borrowed $105000 to be repaid after 3 years. The annual rate of compound interest was 7%.
Calculate the amount of interest for each year and the amount owing at the end of each year.
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- ?Lv 71 十年前最愛解答
The interest for the 1st year
= $105,000 * 7% = $7,350
The amount owing at the end of the 1st year = 105000 + 7350 = $112,350
The interest for the 2nd year
= $112,350 * 7%
= $7,864.5
The amount owing at the end of the 2nd year = 112350 + 7864.5 = $120,214.5
The interest for the 3rd year
= $120,214.5 * 7%
= $8415.015
The amount owing at the end of the 3rd year = 120,214.5 + 8415.015
= $128,629.515
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