Allison accumulated 7,000 in credit card debt. If the interest rate is 15% per year and she does not make any payments for 3 years, how much will she owe on this debt in 3 years for quarterly compounding?

Solución

A ll i so n a cc u m u l a t e d 7, 000 in cre d i t c a r d d e b t . I f t h e in t eres t r a t e i s 15% p er ye a r an d s h e d oes n o t mak e an y p a y m e n t s f or 3 ye a rs, h o w m u c h w i ll s h e o w e o n t hi s d e b t in 3 ye a rs f or q u a r t er l y co m p o u n d in g ?

Principal : 4500.29

Pasos de solución

Translate the problem into an equation:

7000 = P (1 + \frac{0.15}{4})^{4 \cdot 3}

Resolver para

P, 7000 = P (1 + \frac{0.15}{4})^{4 \cdot 3} : P = 4500.29

Principal : 4500.29