Question

A short term loan company agrees to lend Bobby $1,200. The amount (plus interest) is repayable in one year, and the interest rate is 59%. What is the total amount that must be repaid? Give your answer in dollars to the nearest dollar. Do not include commas or the dollar sign in your answer. For example if your answer is $1,234.56 enter 1235.

Answer 1

Answer:$1908

Explanation:

Answer 2

The following parameters are provided in the question:

`\begin{gathered} \text{Principal, P= \$1200} \\ \text{Time, T=1 year} \\ \text{Rate, R=59\%} \end{gathered}`

The simple interest is given by the formula:

`I=(PRT)/(100)`

Thus,

`\begin{gathered} I=(1200*59*1)/(100) \\ I=\text{ \$708} \end{gathered}`

The amount, A, payable in one year is given as:

`\begin{gathered} \text{Amount}=\text{Principal}+\text{Interest} \\ A=1200+708 \\ A=\text{ \$1908} \end{gathered}`