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If you borrow $800 for 6 months at 6% annual simple interest, how much must you repay at the end of the 6 months? 9. If you lend $3500 to a friend for 15 months at 8% annual simple interest, find the future value of the loan.

User Dr Nic
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Final answer:

To repay a $800 loan at 6% annual simple interest over 6 months, the total amount to be repaid is $824. For a $3500 loan at 8% annual simple interest over 15 months, the future value of the loan is $3966.67.

Step-by-step explanation:

To calculate the total amount to be repaid, we can use the formula:

Total Amount = Principal + Interest

Principal = $800

Interest = Principal * Rate * Time

Rate = 6% (convert to decimal by dividing by 100)

Time = 6 months (convert to years by dividing by 12)

Plugging in the values:

Interest = $800 * 0.06 * (6/12) = $24

Total Amount = $800 + $24 = $824

Therefore, you must repay $824 at the end of the 6 months.

For the second question, to find the future value of a loan, we can use the formula:

Future Value = Principal + Interest

Principal = $3500

Interest = Principal * Rate * Time

Rate = 8% (convert to decimal by dividing by 100)

Time = 15 months (convert to years by dividing by 12)

Plugging in the values:

Interest = $3500 * 0.08 * (15/12) = $466.67

Future Value = $3500 + $466.67 = $3966.67

Therefore, the future value of the loan is $3966.67.

User Simon Hayward
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