First, let's convert the interest rate to a quarterly rate:
Quarterly interest rate = (1 + 0.108/4)^(4/4) - 1
Quarterly interest rate = (1 + 0.027)^1 - 1
Quarterly interest rate = 1.027 - 1
Quarterly interest rate = 0.027
Next, we need to calculate the number of compounding periods:
Number of compounding periods = 1.5 years * 4 quarters per year
Number of compounding periods = 6 quarters
Now, plug in these values into the formula:
A = 850(1 + 0.027)^(6) - [(120(1 + 0.027)^(6) - 1)/(0.027)]
A = 850(1.027)^6 - [(120(1.027)^6 - 1)/0.027]
A = 850(1.180612) - [(120 * 1.180612 - 1)/0.027]
A = 1002.52 - [(141.67 - 1)/0.027]
A = 1002.52 - [140.67/0.027]
A = 1002.52 - 5217.78
A = K-5215.26
Therefore, the amount owing after 1.5 years is K5215.26.