A woman loans 10000 for Five years at 10 per year simple int

A woman loans $10000 for Five years at 10% per year simple interest. At the end of

the five years, she spends the whole amount which she then has for 12 years at 12% interest per

year, compounded annually. How much money will she have at the end of 17 year period?

Solution

Amount of loan given 10000 Rate f interest 10% Period of loan 5 years Total interest received 5000 (10000*10% *5) Total amount received at the end of 5 yrs 15000 (10000+5000) Amount invested for another 12 years 15000 Rate of interest compounding 12% Annuity future value for 12 yrs at 12% 3.896 Amount received at the end of 17 yrs (total) 58440 ($ 15000* 3.896) Money she has after 17 years is $ 58440