Answer:
13.
a. $300 interest paid (Total amount with interest - Initial amount)
b. $3300 total amount paid (Total amount with interest)
14.
a. $3360 total amount paid (Total amount with interest)
b. $140 paid monthly (3360 ÷ 24 (24 months in 2 years))
c. Credit card (3300 to pay versus 3360 to pay; credit card $60 cheaper)
Explanation:
Use the simple interest formula when answering these questions:
A = P(1 + rt)
Where:
A = Total Accrued Amount (principal + interest)
P = Principal Amount
I = Interest Amount
r = Rate of Interest per year in decimal; r = R/100
R = Rate of Interest per year as a percent; R = r * 100
t = Time Period involved in months or years
For example:
13.
a. P = 3000, r = 20% = 0.2, t = 6 months = 0.5 years
A = 3000(1 + (0.2)(0.5))
A = 3300
3300 - 3000 = 300
$300 interest paid