Final answer:
To find the total amount due on a $4,900 loan with a 2.75% simple interest rate over 6 months, calculate the interest using the formula Interest = Principal × Rate × Time and then add it to the principal. The interest comes out to $67.38 and the total amount due is $4,967.38.
Step-by-step explanation:
To calculate the amount due on a loan borrowed for a period of time with an annual simple interest rate, you can use the simple interest formula which is Interest = Principal × Rate × Time.
In this scenario, the principal is $4,900, the annual interest rate is 2.75%, and the time is 6 months (or 0.5 years).
First, convert the interest rate from a percentage to a decimal by dividing by 100:
2.75% ÷ 100 = 0.0275.
Now, plug the values into the formula:
Interest = $4,900 × 0.0275 × 0.5
= $67.375.
The total interest accrued over the 6 months will be $67.375. To find the total amount due, simply add the interest to the principal:
Total Amount Due = Principal + Interest
Total Amount Due = $4,900 + $67.375 = $4,967.38.