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Suppose Miguel borrows $6500 at an interest rate of 2% 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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Suppose Miguel borrows $6500 at an interest rate of 2% 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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Suppose Miguel borrows $6500 at an interest rate of 2% 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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Step 1

Given P=$6500 and r=2% compounded annually. So for finding the final amount we use the formula where A=final value, P= principal value, r= annual rate, n= number of year

n
A P 1
100
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n A P 1 100

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Step 2

(a)For n=...

r
A P 1
100
2
A 6500 1
100
1
A 6500 1+
50
51
A 6500x
50
A $6630
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r A P 1 100 2 A 6500 1 100 1 A 6500 1+ 50 51 A 6500x 50 A $6630

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