👤
Answered

Suppose that $2000 is loaned at a rate of 12%, compounded semiannually. Assuming that no payments are made, find the amount owed after 3 years
Do not round any intermediate computations, and round your answer to the nearest cent.

Answer :

The total amount owed after three years is $2,837.04.

The formula that can be used to determine the total amount owed after 3 years is:

FV = A(1 + r/m)^nm

  • FV = Future value of debt
  • A = amount borrowed  
  • R = interest rate = 12/2 = 6%
  • m = number of compounding = 2  
  • N = number of years = 3

$2000 x (1.06)^6 = $2,837.04

To learn more about future value, please check: https://brainly.com/question/18760477

Go Teaching: Other Questions