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Suppose that a loan of $5500 is given at an interest rate of %6 compounded each year. Assume that no payments are made on the loan.

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Answer:

Explanation:

The formula for annual compound interest, including principal sum, is:

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

where

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

P = the principal investment amount (the initial deposit or loan amount)

r = the annual interest rate (decimal)

n = the number of times that interest is compounded per year

t = the number of years the money is invested or borrowed for

here

we have to found semianually

P= 2000

r= 11% =0.11

n=2 .... for semiannual

t =5

A = 2000( 1 +0.11 /2 )(2*5)

= 2000(1 +0.055)10

= 2000(1.055)10

= 2000(1.708)

=3416

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