Joseph borrows $10000 from his sister Katie at an annual interest rate of 10%. If the interest is compounded twice a year, how much does he owe after 12 months? Give your answer in dollars.
A = P ( 1 + r / n) ^( t * n)
where
A = the amt owed
P = amt borrowed
r = the interest rate as a decimal
n = the number of compoundings per year
t = the number of years
A = 10000 ( 1 + .10 / 2)^(2 *1) = 10000 ( 1.05)^2 = $11025
Wait... how come it is 2 years? I thought it said 12 months.
Sorry....I should have written the exponent as ( 1 * 2) rather than (2 * 1)
Same answer however
+75 
