Question

Scott borrowed $8,000 at a rate of 20% compounded semiannually assuming he makes no payments how much will he have over 4 years do not round any intermediate computations around your answer to the nearest ten​

Answer 1

After 4 years, Scott will have approximately $17,148.70.

Explanation:

To calculate how much Scott will have after 4 years, we can use the formula for compound interest:

A = P * (1 + r/n)^(n*t)

where:

A = the future value of the investment/loan, including interest

P = the principal amount (initial borrowed amount) = $8,000

r = the annual interest rate (as a decimal) = 20% = 0.20

n = the number of times the interest is compounded per year (semiannually means twice a year)

t = the number of years = 4

Substitute the values into the formula:

A = 8000 * (1 + 0.20/2)^(2*4)

A = 8000 * (1 + 0.10)^8

A = 8000 * 1.10^8

A = 8000 * 2.143588

A = $17,148.70 (rounded to two decimal places)