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lorasvet [3.4K]
4 years ago
10

Tina, the owner of a home and garden store, lends $8,000 to Lana to help her open an art shop. Lana plans to repay Tina at the e

nd of eight years with interest compounded semiannually at 8%. Using the tables found in the textbook, you can determine that at the end of eight years, Tina will receive A. $14,484. B. $14,984. C. $16,587. D. $16,857.
Mathematics
1 answer:
kupik [55]4 years ago
7 0

Answer:

  B.  $14,984

Step-by-step explanation:

The multiplier is ...

  (1 +r/n)^(nt) . . . . where r is the nominal annual rate, n is the number of times interest is compounded per year, and t is the number of years.

Here, that multiplier is ...

  (1 +.08/2)^(2·8) = 1.04^16 ≈ 1.87298

Then Lana will be paying Tina ...

  $8000×1.87298 ≈ $14984

at the end of 8 years.

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