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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.

 Jun 15, 2021
 #1
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The formula of CI is 

                \(A=P(1+ {r\over n})^{nt}\)

where A = final amount

           P = principal amount

           r = rate

           t = time (in years) 

           n = no. of times compounded

So, here P = 10000, r = 10% = 0.1, n = 2, t = 1 year. 

 

Now, simply put the values

\(A= 10000(1+ {0.1\over 2})^2\)

\(A=$11,025\)

     

 

~Hope you got it. 

 Jun 15, 2021

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