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Suppose that $2000 is loaned at a rate of 7.5% , compounded semiannually. Assuming that no payments are made, find the amount owed after 7 years.
This problem is solved by using the compound interest formula,
A=P(1+interest/period)^nbr of periods.
Interest per period=.075/2=.0375
Number of periods = 7*2=14
ans: The amount owed after 7 years = $3348.60