Final answer:
To calculate the amount owed, use the formula for compound interest: A=P(1+r/n)^(nt). Plugging in the given values ($4000, 10%, 1, 2.5), the amount owed is approximately $5324.48.
Step-by-step explanation:
To calculate the amount you would owe if you borrowed $4000 at an interest rate of 10% annually for 2 1/2 years, you can use the formula for compound interest:
A = P(1+r/n)^(nt)
Where:
- A is the total amount owed
- P is the principal amount borrowed ($4000)
- r is the annual interest rate (10% converted to decimal form as 0.10)
- n is the number of times interest is compounded per year (assuming once annually)
- t is the number of years (2 1/2 years converted to 2.5)
Plugging in these values, we get:
A = 4000(1+0.10/1)^(1*2.5)
A = 4000(1+0.10)^(2.5)
A = 4000(1.10)^(2.5)
A = 4000(1.10^2.5)
A = 4000(1.331)
A = 5324.48
Therefore, you would owe approximately $5324.48 if you borrowed $4000 at an interest rate of 10% annually for 2 1/2 years.