P=250(1+0.04)^9

Question

Scott borrowed $250 from a relative for 9 months.  He agreed to pay compound interest at the rate of 4% a month.

a.  How much interest will he pay his relative when he returns the money at the end of the 9 months?  Explain how you solve this problem

b.  Suppose Scott has to extend the loan to 10 months rather than 9 months.  How much additional interest would he pay for the last month of the loan?  Explain how you solve this problem.

My answer is $355  but the correct answer is $355.83  how did the get the .83?

Answer 1

kompound interest 4% per month * 9 months=1.04^9=1.423311812

250* that=355.8279531

or 355.83$