Question

In: Accounting

$1,000 was borrowed 3 months ago at 1% per month. Calculate how much will be owed...

$1,000 was borrowed 3 months ago at 1% per month. Calculate how much will be owed at the end of next month.

A.) Write a shorthand formula then calculate the value that is owed at the end of next month.

Solutions

Expert Solution

Principal amount $ 1,000
Interest for 5 Month $ 50 =1000*1%*5
Amount owed at the end of next month $ 1,050 =1000+50
or

Amount owed at the end of next month = Principal x rate of interest x no. of months

Amount owed at the end of next month $ 1,050 =1000+(1000*1%*5)

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