Question

Jim borrowed $8000 at a rate of 13%, compounded semiannually. Assuming he makes no payments, how much will he owe after 6 years? Round your answer to the nearest cent.

Answer 1

Given: P = 8000 , rate = 13% and time 6 years and compounded semia annually

To find: Total amount need to be paid after 6 years

Solution:

Since, the amount is comounded semi annually

so, formula for the same can be written as

`A=P(1+((r)/(2))/(100))^(2t)`

Now, putting the values in the above formula and solving for amount

`\begin{gathered} A=8000(1+((13)/(2))/(100))^(2*6) \\ A=8000(1+(6.5)/(100))^(12) \\ A=8000((106.5)/(100))^(12) \\ A=8000(1.065)^(12) \\ A=8000*2.13 \\ A=17040 \end{gathered}`

Hence, he owe to pay amount of $17040 at the end of 6 years