Question

A man took out a $47,000 construction loan to remodel a house. The loan rate is 8.6% simple interest per year to be repaid in six months. How much is paid back?

Answer 1

We will have the following:

First, we determine the monthly interest rate:

`(0.086)/(12)=(43)/(6000)\approx7.2\ast10^(-3)`

So, the monthly interest will be 43/600, so:

`A=47000(1+((43)/(6000))(6))\Rightarrow A=49021`

So, he will have to pay back $49 021.