Question

Marta takes a loan of $11,158 at an interest rate of 5.37%, compounded quarterly.

Assuming no payments are made, find the amount owed after 5 years. Round to the
nearest dollar.

Answer 1

To find the amount owed after 5 years, use the compound interest formula with the given principal, rate, compounding period, and time. The amount owed is approximately $14,363.

Step-by-step explanation:

To find the amount owed after 5 years, we can use the compound interest formula:

Amount = Principal × (1 + rate/n)^(nt)

Where:

• Principal = $11,158
• Rate = 5.37% or 0.0537 (converted to decimal)
• n = 4 (compounded quarterly)
• t = 5 (5 years)

Plugging these values into the formula:

Amount = $11,158 × (1 + 0.0537/4)^(4 × 5)

Calculating this expression, we get:

Amount = $14,363.08

So, the amount owed after 5 years is approximately $14,363. Rounded to the nearest dollar, it is $14,363.