Question

Teddy borrows $4,890 on 8% interest rate for 18 months. What will that total principal + interest payment to the nearest dollar?

Answer 1

Principal (P): $ 4890

Rate (R): % 8

per year

Time (t): Month 18

Equation:

A = P(1 + rt)

First, converting R percent to r a decimal

r = R/100 = 8%/100 = 0.08 per year.

Putting time into years for simplicity,

18 months / 12 months/year = 1.5 years.

Solving our equation:

A = 4890(1 + (0.08 × 1.5)) = 5476.8

A = $5,476.80