Question

Patricia nichols took out a $4,000 simple interest loan at 12% for 12 months. After 5 payments, the balance was $2,526.85. She pays off the loan when the next payment is due. a. What is the current month's interest? b. What is the final payment

Answer 1

a)$25.27 b)$ 2552.12

Explanation:

current month's interest = balance × rate × 1/12 since one year equals 12 months

current month's interest = 2526.85 × 0.12 × 1/12 = $ 25.27

b) the final payment = previous balance + 25.27 = 2526.85 + 25.27 = $ 2552.12