Question

Debra borrowed $8000 at a rate of 20%, compounded semiannually. Assuming she makes no payments, how much will she owe

after 8 years?
Do not round any intermediate computations, and round your answer to the nearest cent.

Answer 1

Debra will owe $37,320 after 8 years.

Step-by-step explanation:

To calculate the amount Debra will owe after 8 years, we can use the compound interest formula:

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

Where:

A is the amount after time t,

P is the principal,

r is the annual interest rate (in decimal form),

n is the number of times interest is compounded per year, and

t is the number of years.

Substituting the given values, we have:

A = 8000(1 + 0.20/2)^(2 * 8)

A = 8000(1 + 0.10)^16

A = 8000(1.10)^16

A = 8000(4.665)

A = $37,320

Therefore, Debra will owe $37,320 after 8 years.