Question

Mark lends $3350 to Ivan at a 6.25% per year. How much will Mark receive if Ivan repays the entire loan and interest after 8 months?

Answer 1

to the risk of sounding redundant.

keeping in mind that 8 months is not even a year, and since there 12 months in a year, then 8 months is 8/12 years

`\bf ~~~~~~ \textit{Simple Interest Earned Amount} \\\\ A=P(1+rt)\qquad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill & \$3350\\ r=rate\to 6.25\%\to (6.25)/(100)\dotfill &0.0625\\ t=years\to (8)/(12)\dotfill &(2)/(3) \end{cases} \\\\\\ A=3350\left[1+(0.0625)\left((2)/(3) \right) \right]\implies A=3350(1.041\overline{6})\implies A\approx 3489.58`

Answer 2

$3489.58

Explanation:

The amt. Mark will receive is calculated as follows:

original amount + simple interest would be:

$3350 + $3350 * 0.0625 * (8 mo)( 1 yr ) / (12 mo)

or: $3350 + $139.58 = $3489.58