Question

Anne Katz, owner of Katz Sport Shop, loans $8,000 to Shelley Slater to help her open an art shop. Shelley plans to repay Anne at the end of 8 years with interest compounded semiannually at 8 percent. At the end of 8 years, Anne will receive:

Answer 1

total interests in 8 years= p*t*r/100
= (8000* 8 * 8)/100= 5120

so total payback= 8000+5120= $ 13,120. answer

Answer 2

amount received = 8000*(1 + 0.08)^16
= $27407.54

Answer 3

mukesh009's calculation was for simple interest not compound

Answer 4

I am assuming that you have to use a book for this to get a table, and if that is the case, you have 16 periods at 4%. The reason for this is because it is compounded semiannually. You multiply the years by 2 and divide the interest by 2.

When you look at the table, you need to multiply $8,000 by 1.8730 which gives you an answer of $14,984. I hope this helps you!