John is facing very difficult financial times and can only pay the interest on a $10,000 loan he has taken. The bank charges him a quarterly compound rate of 10%. What is the approximate interest he pays annually? Select:
A) 4000
B) 9500
C) 2500
D) 2000
E) 4500
An easy way too attempt this is by approximation:   For the first quarter, he pays 10% of 10,000 which is $1000.   So for the four quarters in the year, he will approximately play  1000*4= 
<gadget id="calculator"> 1000*4</gadget>
<output>4_000</output>
4000 over the entire year.   Because of compound interest it will be more than 4000. Approx. option E is correct.   Answer :4500
<result>E</result>
John is facing very difficult financial times and can only pay the interest on a $10,000 loan he has taken. The bank charges him a quarterly compound rate of 10%. What is the approximate interest he pays annually?