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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.

 May 22, 2021
 #1
avatar+119820 
+2

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

 

 

cool cool cool

 May 22, 2021
 #2
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0

Wait... how come it is 2 years? I thought it said 12 months.

 May 28, 2021
 #3
avatar+119820 
0

Sorry....I  should  have  written  the  exponent  as  ( 1 * 2)   rather  than (2 * 1)

 

Same  answer however

 

 

cool cool cool

CPhill  May 29, 2021

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