Question

Sam is getting ready for a big date when he realizes that he has no money. his roommate, bill, also has no money, but he has a credit card. knowing that nobody will let sam use bill’s credit card, sam asks bill to pull out a cash advance for $120.00. bill agrees under the condition that sam is responsible for all interest that accrues on the cash advance which is a 30% interest rate, compounded monthly. 5 full years go by before the $120 cash advance is repaid. how much should bill ask sam to pay in interest for the cash advance?

Answer 1

Recall that to compute for the new amount of the original sum at a compound interest is A(t) = P(1 + r/n)^(nt) where P is the original amount, r is the interest rate, n is the number of times P is compounded each year, and t is the number of year. With this, the total amount owed by Sam in five full years becomes [(120)(1 + 0.30/12)^60 ]. The total interest is the difference between the original amount owed and the amount that needs to be paid over time. Thus, total interest is [(120)(1 + 0.30/12)^60 ] - 120 = 407.97. Therefore, the total interest is $407.97.

Answer 2

Answer:

its c on edgd2020

Step-by-step explanation: