If we borrowed $500 for 6 years at a rate of 7% interest then we will have to pay approximately $750 after 6 years.
Given that principal amount is $500 , years are 6 and rate of interest be 7%.
We are required to find the amount that we have to pay after 6 years if we borrow $500.
Compound interest is the interest that is calculated on the principal plus the accumulated interest at that point of time.
Sum after compounding is given as under:
S=P[tex](1+R)^{N}[/tex]
So we have to just put the values to find the money that we have to pay after 6 years.
S=500[tex](1+0.07)^{6}[/tex]
=500[tex](1.07)^{6}[/tex]
=500*1.5
=$750
Hence if we borrowed $500 for 6 years at a rate of 7% interest then we will have to pay approximately $750 after 6 years.
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