Respuesta :
irini owes olena at the end of one year is $9,329.39
By using compound interest to solve the question
A=p (1+ r/n) ^nt
A= future amount to be returned (unknown)
P= principal (present value) =$9,000
r = 3.6% = 0.036
t = 1year
n = 12 payments in a year ( the rate compounded monthly)
A= 9000 {1 + (0.036/12)} ^ 12
A = 9000 ( 1+0.003) ^12
A = 9000 (1.003) ^12
A = $9,329.39 as the amount to owe.
The nominal interest rate, sometimes known as the nominal rate of interest, can refer to one of two different concepts in finance and economics:
- the interest rate before adjusting for inflation (in contrast with the real interest rate)
- without making any adjustments to account for the full impact of compounding, for interest rates "as stated" (also referred to as the nominal annual rate).
If the basic time unit in which an interest rate is reported is not the same as the frequency of compounding (for example, a month), the interest rate is said to be nominal (normally a year).To account for the effects of inflation, the real interest rate idea is helpful. In the case of a loan, the lender effectively obtains this actual interest.
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