Answer and Explanation
To calculate the amount due at the end of 4 years when $1,900 is borrowed at 5.5% interest compounded annually, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money accumulated after n years, including interest
P = the principal amount ($1,900 in this case)
r = annual interest rate (5.5% or 0.055 as a decimal)
n = number of times the interest is compounded per year (annually in this case, n = 1)
t = time in years (4 years in this case)
Plugging in the values:
A = $1,900(1 + 0.055/1)^(1*4)
A = $1,900(1.055)^4
A ≈ $1,900 * 1.233618625
A ≈ $2,350.87
Therefore, the amount due at the end of 4 years if $1,900 is borrowed at 5.5% interest compounded annually is approximately $2,350.87.
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