To Finance Your Education, You Borrow $10,000 from a Relative

Multiple Choice

To finance your education, you borrow $10,000 from a relative at an annual interest rate of 5%. You promise to pay her back in eight years. Which formula will provide the correct formula for calculating the value of your payment in eight years?

A) $10,000(1 + 0.05)
B) $10,000(1 + 5)
C) $10,000(1 + 0.05) ⁸
D) $10,000(1 + 0.5) ⁸