A loan of $15,000 is taken with an annual interest rate of 6% compounded monthly. What is the amount owed after 2 years?

Tue, 05 May 2026 03:14:27 +0000

**Is A Loan of $15,000 Taken with 6% Annual Interest Compounded Monthly Really What You Need to Know?** What’s driving growing interest in loans of $15,000 with a 6% annual rate compounded monthly? In today’s dynamic financial landscape, affordable borrowing solutions are under increased scrutiny—especially where interest accrual methods create invisible cost shifts. For US consumers navigating debt, understanding exactly how such loans grow over time helps with smarter financial planning. Understanding compound interest is key. When a loan of $15,000 is taken at 6% annual interest compounded monthly, interest isn’t charged once per year—it compounds monthly, meaning each payment builds on the previous balance plus accrued interest. This process steadily increases the total owed, even on relatively small principal amounts, if held over time. The math behind this reveals clear patterns. With a 6% annual rate compounded monthly, the monthly interest rate is 0.5% (6% ÷ 12). Over 24 months, the formula for compound interest becomes:
**Amount owed = Principal × (1 + monthly rate)^(number of months)**
That gives $15,000 × (1 + 0.005)^24 ≈ $16,977. This reflects how small differences in monthly compounding accumulate into measurable debt growth.