Question

Marc maxwell took out a simple interest loan at 13% interest for 12 months. his previous balance is $2,681.04. what is the final payment if the loan is paid off with the next payment? (hint: to calculate the payoff, find the interest on the balance due. then, add the interest to the balance due.) $2,876.91 $2,710.08 $2,801.01 $2,998.01

Answer 1

Option $2,710.08

Explanation:

The simple interest = 13 %

Time = 12 months

Previous balance = $ 2 681.04

Final amount:

`A = P (1 + rt)`

where A = final amount

P = intial principle balance

r = annual interest rate

t = time (years)

thus, final amount = 2 681.04 (1 + 0.13(12))

= $ 2710 .08

Answer 2

Simple interest is given by:
S.I.=(PRT)/100
where:
P=principle
R=rate
T=time
from the question:
P=2681.04
R=13%
T=12 months=1 year
thus;
S.I=(2681.04×1×1.3)/100
=$34.85352
The total amount payable will be:
Total amount=principle+interest
=34.85342+2681.04
=$2715.90 This is approximately equal to $2,710.08