Given:
Principal(p) = $9000 rate(r) = 7% = 0.07
n=1 (number of time the interest is compounded)
a)
time (t) = 1
Using the formula;
[tex]A=p(1+\frac{r}{n})^{nt}[/tex][tex]=9000(1+\frac{0.07}{1})^{1\times1}[/tex][tex]=9000(1.07)[/tex][tex]=9630[/tex]Hence, the amount owed at the end of the year is $9630
b)
t=2
Substitute the values into the formula and evaluate
[tex]A=9000(1+\frac{0.07}{1})^{1\times2}[/tex][tex]=9000(1.07)^2[/tex][tex]=9000(1.1449)[/tex][tex]=10304.1[/tex]Hence, the amount owed at the end of 2 years is $10304.1
