Question

Devon lends $2, 700.00 to Claudia at a simple interest of 12% per year. Claudia returned him $3,000.00 and a video game console after 3 years to clear the account. What is the price of the video game console?

Answer 1

To calculate the price of the video game console we need to calculate the simple interest first:

Simple Interest = (Principal x Rate x Time)

Simple Interest = (2700 x 0.12 x 3) = $972.00

Now we know the interest, we can calculate the price of the video game console by subtracting the interest from the total amount Claudia returned:

Price of the video game console = $3,000.00 - $972.00 = $2,028.00

So, the price of the video game console is $2,028.00