Solve the problem.
-Daryl borrows $3,750 at a rate of 10.5% compounded semiannually. Find how much Daryl owes at the end of 5 years. Use: $A = P \left( 1 + \frac { r } { n } \right) ^ { n t }$ where:
$\mathrm { A } =$ final amount
$\mathrm { P } = \$ 3,750$ (the amount borrowed)
$r = 10.5 \% = 0.105$ (the annual rate of interest)
$\mathrm { n } = 2$ (the number of times interest is compounded each year)
$t = 5$ (the duration of the loan in years)
A) $\$ 4,843.30$
B) $\$ 6,880.90$
C) $\$ 39,468.75$
D) $\$ 6,255.36$

Question

Quizplus · Accepted Answer

Using the formula $A = P \left( 1 + \frac { r } { n } \right) ^ { n t }$, we substitute $P = 3750$, $r = 0.105$, $n = 2$, and $t = 5$. This gives us $A = 3750 \left( 1 + \frac { 0.105 } { 2 } \right) ^ { 2 \times 5 }$, which calculates to approximately $6,255.36.

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