Respuesta :
Answer: he will need to pay $554 when the loan is due.
Step-by-step explanation:
We would apply the compound interest formula which is expressed as
A = P(1+r/n)^nt
Where
A = total value of the loan at the end of t years.
r represents the interest rate.
n represents the periodic interval at which it was compounded.
P represents the principal or initial amount borrowed.
From the information given,
P = 500
r = 2% = 2/100 = 0.02
n = 12 because it was compounded 12 times in a year.
t = 5 years
Therefore,
A = 500(1+0.02/12)^12 × 5
A = 500(1+0.0017)^60
A = 500(1.0017)^60
A = $554 to the nearest dollar
