Question

Eiman borrowed $8000 at a rate of 14.5%, compounded semiannually. Assuming she makes no payments,

how much will she owe after 6 years?
Do not round any intermediate computations, and round your answer to the nearest cent.?

Answer 1

1,717,351cents

Explanation:

Using the compound interest formula

A = P(1+r/n)^nt

P = 8000

r = 14.5% = 0.145

n = 6/12 = 1/2 (semi annually)

t = 6years

Substitute

A = 8000(1+ 0.145/0.5)*(0.5)(6)

A = 8000(1+0.29)^3

A = 8000(1.9)^3

A = 8000(2.146689

A = 17,173.512

Hence the amount owned to the nearest cent is 1,717,351cents