Question

Suppose that

$2000

is loaned at a rate of
9%

, compounded annually. Assuming that no payments are made, find the amount owed after
10

years.
Do not round any intermediate computations, and round your answer to the nearest cent.

Answer 1

2000 dollars is owed with 9% interest rate.
Now, assuming that for 10 years, it is not being paid.
Let's calculate for the money that is now owed.
=> 2000 dollars * . 09 = 180 dollars for 1 years
=> 180 dollars * 10 years = 1800 dollars
=> 2000 + 1800 = 3800 dollars for 10 years.