Lynn Ally, owner of a local Subway shop, loaned $59,000 to Pete Hall to help him
ID: 2533905 • Letter: L
Question
Lynn Ally, owner of a local Subway shop, loaned $59,000 to Pete Hall to help him open a Subway franchise. Pete plans to repay Lynn at the end of 7 years with 10% interest compounded semiannually. How much will Lynn receive at the end of 7 years?Amount Recieved $___________
Show work Lynn Ally, owner of a local Subway shop, loaned $59,000 to Pete Hall to help him open a Subway franchise. Pete plans to repay Lynn at the end of 7 years with 10% interest compounded semiannually. How much will Lynn receive at the end of 7 years?
Amount Recieved $___________
Show work
Amount Recieved $___________
Show work
Explanation / Answer
We use the formula
A=P(1+r/200)^2n
Where A=future value
P=present value
R is rate of interest
N=time period
Hence
A=59000(1+0.1/2)^(2*7)
=$59000*1.979931599
Which is equal to
=$116,815.96(Approx).
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