Question

Roper Fox took out a simple interest loan at 5% interest for 12 months. His previous balance is $200. What is his final payment if the loan is paid off with the next payment?

Answer 1

how i looked at this was finding the interest total in 1 year which is $10. since he is paying it off at the next payment(in one month) divide 10 by 12 for the interest in one month add that $200 as that was the base starting price

Answer 2

His final payment if the loan is paid off with the next payment is:

$ 200.83

Explanation:

It is given that:

Roper Fox took out a simple interest loan at 5% interest for 12 months.

His previous balance is $200.

The interest on the loan that is to be paid on the previous balance is calculated as:

`Interest=(200* 5* 1)/(12* 100)\\\\\\Interest=0.83`

Hence, the final payment is:

Previous balance+Interest

= 200+0.83

=$ 200.83

Hence, the answer is:

$ 200.83