C is the correct answer, right? Cannot find it in file

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

Formula: 1200(1.1)^3 =400

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1 Answer(s)

The formula you have applied is correct but calculates amount. To calculate interest subtract principal from it.

So you will get 1200(1.1)^3-1200 =  397.2 ~ 400. Hence, C

Expert Answered on January 31, 2018.
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