Answer:
Rounding this to the nearest cent, the amount owed after 5 years is approximately $3102.65.
Explanation:
To calculate the amount owed after 5 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount (amount owed)
P = the principal amount (initial loan)
r = the annual interest rate (in decimal form)
n = the number of times interest is compounded per year
t = the number of years
Given:
P = $2000
r = 9.5% = 0.095 (decimal form)
n = 4 (compounded quarterly)
t = 5 years
Plugging these values into the formula, we get:
A = 2000(1 + 0.095/4)^(4*5)
Calculating this expression gives us:
A ≈ $2000(1.02375)^(20)
A ≈ $2000(1.55132625)
A ≈ $3102.65
Rounding this to the nearest cent, the amount owed after 5 years is approximately $3102.65.