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Jonny borrows $30,000 from Tony at 2% daily interest compounded daily.

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Jonny borrows $30,000 from Tony at 2% daily interest compounded daily.  [#permalink]

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New post 17 Oct 2016, 22:17
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A
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D
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Difficulty:

  15% (low)

Question Stats:

83% (00:46) correct 18% (00:47) wrong based on 80 sessions

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Johnny borrows $30,000 from Tony at 2% daily interest compounded daily. How much does Johnny owe Tony after 8 weeks?

a) 30000*0.02^56
b) 30000*1.12
c) 30000*2.12
d) 30000*1.02^56
e) (30000*1.02)^56

Please assist with above problem.
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Re: Jonny borrows $30,000 from Tony at 2% daily interest compounded daily.  [#permalink]

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New post 18 Oct 2016, 07:59
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alanforde800Maximus wrote:
Johnny borrows $30,000 from Tony at 2% daily interest compounded daily. How much does Johnny owe Tony after 8 weeks?

a) 30000*0.02^56
b) 30000*1.12
c) 30000*2.12
d) 30000*1.02^56
e) (30000*1.02)^56

Please assist with above problem.


\(A =\) \(P(1+\frac{r}{100})^n\)

So, \(A =\) \(30000(1+\frac{2}{100})^{7*8}\)

So, \(A =\) \(30000(1.02)^{56}\)

Hence answer will be (D) \(A =\) \(30000(1.02)^{56}\)
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Re: Jonny borrows $30,000 from Tony at 2% daily interest compounded daily.  [#permalink]

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New post 28 Nov 2017, 13:47
1
Hi All,

This question is a variation on a typical Compound Interest question. Thus, we'll need the Compound Interest Formula:

Total = (Principal)(1 + R)^T where R is the interest Rate and T is the number of 'time periods'

In this question, the variables are:
Principal = $30,000
R = .02/day
T = 8 weeks = 8(7) = 56 days

Thus, the equation becomes:
(30,000)(1.02)^56

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Re: Jonny borrows $30,000 from Tony at 2% daily interest compounded daily. &nbs [#permalink] 28 Nov 2017, 13:47
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