#### Explanation:

Although the question does not state the period over which the 10.5% rate applies, it's reasonable to assume 1 year - normally written 10.5% p.a. (Per annum).

With that assumption, the rate per month $= \frac{r}{12}$ so the compound interest fomula compounded monthly reduces to:

$A = P {\left(1 + \frac{r}{12}\right)}^{t}$

Where: P=$5,000, r=10.5% and $t = 4$months (In this example) Hence: $A = 5000 {\left(1 + \frac{10.5}{100 \cdot 12}\right)}^{4}$$= 5000 {\left(1 + 0.00875\right)}^{4}$$= 5000 \times 1.0352 = 5177.31$(to 2 decimals) Laura therefore owes $5,177.31 after 4 months.