RSOHAL wrote:

Nathan took out a student loan for 1200$ at 10 percent annual interest, compounded annually. If he did not repay any of the loan or interest during the first 3 years, which of the following is the closest to the amount of interest he owed for the 3 years.

A. 360

B. 390

C. 400

D. 410

E. 420

Principal amount is : 1200

Total amount after

1st yr = 1200 x 1.1 = 1320

2nd yr = 1320 x 1,1 = 1452

3rd yr = 1452 x 1.1 = 1597.2

Amount of interest he owed after 3 years = 1597.2 - 1200 = 397.2 ....... The closest value is 400.

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