  # O EXPONENTIAL AND LOGARITHMIC FUNCTIONSIntroduction to compound interestSuppose that a loan of \$2500 is given at an interest rate of 18% compounded each year.Assume that no payments are made on the loan.Follow the instructions below. Do not do any rounding.(a) Find the amount owed at the end of 1 year.(b) Find the amount owed at the end of 2 years.?

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See attached help_outlineImage TranscriptioncloseO EXPONENTIAL AND LOGARITHMIC FUNCTIONS Introduction to compound interest Suppose that a loan of \$2500 is given at an interest rate of 18% compounded each year. Assume that no payments are made on the loan. Follow the instructions below. Do not do any rounding. (a) Find the amount owed at the end of 1 year. (b) Find the amount owed at the end of 2 years. ? fullscreen
check_circleExpert Solution
Step 1

We know that,

Step 2

Part a

Here, P = \$2500, r = 18% = 0.18 and t = 1.

Since, it is compounded annually so n = 1. help_outlineImage Transcriptionclose0.18 1x1 A 2500 2500(1 +- 1 2500 2500 (1+ 0.18 = 25002500(1.18) - 25002950 = 5450 fullscreen
Step 3

Part b

Here, P = \$2500, r = 18% = 0.18 and t = 2.

Sinc... help_outlineImage Transcriptionclose0.18 1x2 A 2500 2500(1 +' 1 2 2500 2500 (1+ 0.18 2500 2500(1.3924) - 25003481 5981 fullscreen

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