This is my last problem. Help?????

Question

In 1777, George Washingtion's amy received a loan of $450,000. Interest rate is 6%
How much was owed on the loan in 1989?

This is how i did it.
1989-1777= 212 years. If one year is 6%, then 212(6) is1272%.

$450,000*12.72= $5,724,000.

Is it right?

Answer 1

More information is needed.

What kind of interest was it, compounded or non-compounded?

If its non-compounded interest, then what you do is follows:

1989-1777= 212
212(6) is1272%
$450,000*12.72= $5,724,000 - this is only interest
You must add the original debt
$5,724,000 + $450,000 is the answer

If its compounted interest,

you need to consider the following, you owe 450000 * 1.06 = $ 477000 after 1 year,

you owe 477000 * 1.06 = $505620 after 2 years

so on for 212 years, and to write this mathematically, you would do

450000 * (1.06 to the power of 212)

Answer 2

STRAIGHT INTEREST:

If it is straight interest without any compounding then that would be the amount of interest they would owe (plus the original principal, I'm assuming).

In other words, they would owe 6% a year ($27,000) in interest. 27,000 x 212 years = $5,724,000, just like you calculated. However, don't forget to add in the original loan that they still owe for a total of:
$6,174,000.

COMPOUNDED INTEREST:

However if the interest compounds annually, let's say, then you would owe $27,000 the first year for a total of $477,000. The next year they would owe 6% of this or $28,620 additionally, for a total of $505,620 in 1779, etc. The exact formula is 450,000 * 1.06^212.

Compounded this way they would owe more than $100 *billion* in 1989. It would be even more if it was compounded quarterly, monthly or daily...

Answer 3

The formula for calulating simple interest is i=prt
p=the principle ($450,000)
r=rate of interest (6% or .06)
T=time 1989-1777=212 years

so if interest=prt by substituting we get
i=($450,000)x.06x 212=$5724000

So we need to add the amount of interest ($5,724,000) to the original amount of money we started with ($450,000)

5,724,000+450,000=$6,174,000

The amount owed in 1989 is $6,174.000

Answer 4

No, because interests are reinverted.
In 1778 he owed 0.06*450 000 of interests + the 450 000 loan=
450000*(1.06)=477000
In 1779 he owed the above + 6% of interest of above amount:
477000*0.06+477000= 477000*(1.06)=505620
However, to get a general formula, you can see that the final amount (debt+interests) is the initial amount times (1+0.6)^y,
for 1 year y=1, for 2 years y=2, for 212 years y=212.
Thus the total amount is:
450000*(1.06^212) =104,245,171,919.427
which is 231,655.94 times the original amount

Answer 5

y got the interest part right
what u calculated is the simple interest
which is simply "initial amoun*rate*time"
but u still owe the initial amount too.
So the total amt due would be 450,000+5,724,000.

Answer 6

I think so.

Answer 7

I dont no or care! lol

Answer 8

NOOOOO!!!!!!