Question

A man borrowed $3,700 from a bank for 6 months. A friend was a co-signer. The bank collected 8.5% simple interest on the date of maturity. How much did the man pay for the use of the money ?

Answer 1

The man paid $157.25 for the use of the money.

Step-by-step explanation:

To calculate the amount paid for the use of the money, we need to calculate the simple interest. Simple interest is calculated using the formula: I = P * r * t, where I is the interest, P is the principal (the amount borrowed), r is the interest rate, and t is the time in years. In this case, P is $3,700, r is 8.5% (or 0.085 as a decimal), and t is 6 months (or 0.5 years).

Plugging in the values, I = $3,700 * 0.085 * 0.5 = $157.25. Therefore, the man paid $157.25 for the use of the money.