Question

Suppose that 2000 is loaned at a rate of 19.5

Answer 1

In order to calculate the final value after 7 years, we can use the formula below:

`A=P\cdot(1+(i)/(n))^(nt)_{}`

Where A is the final amount after t years, P is the principal (initial value), i is the annual interest rate and n is how many times the interest is compounded in a year.

So, for P = 2000, i = 0.195, t = 7 and n = 2, we have:

`\begin{gathered} A=2000(1+(0.195)/(2))^(2\cdot7) \\ A=2000(1.0975)^(14) \\ A=7356.88 \end{gathered}`

Therefore the final amount is $7356.88.