Question

Kathy Crag, owner of “The Fabric Corner,” loaned $15,000 to Dani Flynn to open her own “Hallmark” card shop. Dani plans to repay Kathy the $15,000 plus 8% interest compounded quarterly as a lump sum at the end of 12 years. How much will Kathy receive from Dani at the end of 12 years?

Answer 1

Here,Kathy has borrowed $ 15,000 from Dani Flynn for her shop.

Loan Amount = P = $ 15,000

Rate of Interest =R = 8% p.a compounded quarterly

we are asked , how much will kathy receive from Dani at end of 12 years

So, Period of loan = N = 12 years

The total Amount which Dani will receive is given by formula,

A= $ 38,806

So, Dani will receive total $ 38,806 from Kathy which includes Principal loan $ 15,000 & remaining as interest.