suppose that a loan of $9500 is given at an interest rate of 18% compounded each year. assume that no…

Explanation:

Step1: Recall compound - interest formula

The compound - interest formula is $A = P(1 + r)^n$, where $P$ is the principal amount, $r$ is the annual interest rate (as a decimal), and $n$ is the number of years. Here, $P=$9500$, $r = 0.18$.

Step2: Calculate amount owed at the end of 1 year

For $n = 1$, substitute the values into the formula: $A_1=P(1 + r)^1$. So, $A_1=9500\times(1 + 0.18)=9500\times1.18 = 11210$.

Step3: Calculate amount owed at the end of 2 years

For $n = 2$, substitute $P = 9500$, $r=0.18$ into the formula: $A_2=P(1 + r)^2=9500\times(1 + 0.18)^2=9500\times1.18^2=9500\times1.3924 = 13227.8$.

Answer:

(a) $11210 (b) $13227.8