Question

Suppose that $2000 is loaned at a rate of 11.5%, compounded annually. Assuming that no payments are made, find the amount owed after 6 years.Do not round any intermediate computations, and round your answer to the nearest cent.

Answer 1

Given

The amount loaned is $2000.

The interest rate is 11.5%.

Time taken is 6 years.

To find, the amount owed after 6 years.

Step-by-step explanation:

It is given that,

The amount loaned is $2000.

The interest rate is 11.5%.

Time taken is 6 years.

Then,

`\begin{gathered} A=P(1+(r)/(100))^t \\ =2000(1+(11.5)/(100))^6 \\ =2000(1.115)^6 \\ =\text{ \$}3843.078 \end{gathered}`

Hence, the answer is $3843.08.