# Question 94cd0

$1166.40 #### Explanation: Recall that the formula for compound interest is: $\textcolor{b l u e}{| \overline{\underline{\textcolor{w h i t e}{\frac{a}{a}} A = P {\left(1 + i\right)}^{n} \textcolor{w h i t e}{\frac{a}{a}} |}}}$where: $A =$future value $P =$principal (starting amount) $i =$interest rate per compounding period $n =$number of compounding periods $1$. Start by substituting your values into the formula. Note that in your case, one compounding period would be equal to one year. $A = P {\left(1 + i\right)}^{n}$$A = 2000 {\left(1 + 0.08\right)}^{2}$$2$. Solve for $A$. A=$2332.80
$3$. Since the money is paid back in two equal annual installments, divide the value of $A$ by $2$. This is the amount of money that will be paid each year until the debt is paid off.
$x = A \div 2$
x=$2332.80-:2 color(green)(|bar(ul(color(white)(a/a)x=$1166.40color(white)(a/a)|)))
$\therefore$, the annual installment is \$1166.40#.