Answer:
$6,655,000
Explanation:
[tex]A = P(1\ +\ r)^{n}[/tex]
wherein, A= Amount
P= Principal
R= Rate of interest per annum
n = term to maturity
Pay off amount at the end of year 3 = $5,000,000[tex](1\ +\ .10)^{3}[/tex]
Amount = $5,000,000 × 1.331 = $ 6,655,000
Amount due of a borrowing is equal to the money borrowed initially compounded at a rate of interest for a known period.
Above. rate of interest is 10%, since the money has been repaid only upon due date, three year compounding of the said sum at 10% per annum rate of interest yields the payoff amount which is $6,655,000
