Suppose that a loan of \( \$ 5500 \) is given at an interest rate of \( 7 \% \) compounded each year. Assume that no payments are made on the loan. Follow the instructions below. Do not do any rounding. (a) Find the amount owed at the end of 1 year. \( \$ \square \) (b) Find the amount owed at the end of 2 years. \( \$ \square \)

To find the amount owed at the end of each year with compound interest, you can use the formula: \[ A = P(1 + r)^t \] where \( A \) is the amount owed, \( P \) is the principal (the initial loan amount), \( r \) is the annual interest rate (expressed as a decimal), and \( t \) is the number of years. (a) For the end of 1 year: \[ A = 5500(1 + 0.07)^1 = 5500(1.07) = 5885 \] So, the amount owed at the end of 1 year is \( \$5885 \). (b) For the end of 2 years: \[ A = 5500(1 + 0.07)^2 = 5500(1.07)^2 = 5500(1.1449) \approx 6287.45 \] So, the amount owed at the end of 2 years is approximately \( \$6287.45 \).