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Kenny borrows $3390 at 1.3% simple interest per month. When Kenny pays the loan back 6 years later, what is the total amount that Kenny ends up repaying?

A. $6563.04
B. $3434.07
C. $216.96
D. $3173.04

User Sarahjayne
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1 Answer

1 vote

Final answer:

Kenny repays a total of $6563.04 for a $3390 loan with 1.3% monthly interest over 6 years, calculated using the simple interest formula.

Step-by-step explanation:

To calculate the total amount that Kenny ends up repaying for a $3390 loan at 1.3% simple interest per month, after 6 years, we first need to compute the total interest and then add it to the principal amount.

Simple interest can be calculated using the formula:

I = P × r × t

Where:

  • I is the interest
  • P is the principal amount
  • r is the interest rate per period
  • t is the number of periods

Given that:

  • P = $3390
  • r = 1.3%
  • t = 6 years × 12 months/year = 72 months

The total interest (I) is calculated as follows:

I = $3390 × 0.013 × 72

I = $3173.04

To find the total amount repaid, we add the interest to the principal:

Total Repayment = Principal + Interest

Total Repayment = $3390 + $3173.04

Total Repayment = $6563.04

Therefore, the total amount that Kenny ends up repaying is $6563.04, which corresponds to option A.

User Sangorys
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