Answer :
Answer:
[tex]\begin{gathered} A=\text{ \$4,720 at the end of 1 year} \\ A=\text{ \$5,570 at the end of 2 year} \end{gathered}[/tex]Step-by-step explanation:
The compound interest is represented by the following equation:
[tex]\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ where, \\ P=\text{ principal borrowed} \\ r=\text{ rate} \\ n=\text{ number of times compounded per time ''t''} \\ t=\text{ time in years} \end{gathered}[/tex]Therefore, if Latoya borrows $4000 at an interest rate of 18% compounded each year;
[tex]\begin{gathered} A=4000(1+\frac{0.18}{1})^1 \\ A=\text{ \$4,720 at the end of 1 year} \end{gathered}[/tex]Now, at the end of 2 years:
[tex]\begin{gathered} A=4000(1+\frac{0.18}{2})^2 \\ A=\text{ \$5,569.6 at the end of 2 year} \end{gathered}[/tex]