A student takes out a college loan of $6000 at an annual percentage rate of 4%, compounded monthly. a. If the student makes payments of $400 per month, how much, to the nearest dollar, does the student owe after 6 months?

$ 3720

Explanation:

As per given case of compound interest :

; where

A = Final Amount, P = Principle,  r = rate of interest , t = no. of time periods, n = no. of compounding per time period

Taking: P = 6000 ; t = 6 months , n = 1 (per month) ; r (annual %) = 4% , so r (monthly % ) = 4 / 12 = 0.33% = 0.0033

A = 6000 (1.0200)

A = 6120 [Total Amount Owed]

Amount paid : 400 per month = 400 x 6 =  2400

Amount student still owes = Total amount owed - Amount paid

6120 - 2400

= 3720

answer; balance sheets;

answerindustrial revolution;