Answer:
(a) The interest on a simple interest loan is calculated using the formula:
Interest = Principal x Rate x Time
where:
Principal is the amount of the loan
Rate is the interest rate per time period
Time is the duration of the loan in the same time period as the interest rate
In this case, the principal is $8000.00, the rate is 9.00% per year, and the time is 9 months. To calculate the interest, we need to convert the time to years by dividing by 12:
Time in years = 9 months / 12 months per year = 0.75 years
Plugging in the values, we get:
Interest = $8000.00 x 0.09 x 0.75
Interest = $540.00
Therefore, the student must pay $540.00 in interest.
(b) The future value of a simple interest loan is calculated using the formula:
Future Value = Principal + Interest
In this case, the principal is $8000.00 and the interest is $540.00, so the future value is:
Future Value = $8000.00 + $540.00
Future Value = $8540.00
Therefore, the future value of the loan is $8540.00.
Explanation: