Question

Find the amount due on the loan round to the nearest cent.

principal= $4,000
rate =7 1/2 %
time in months = 3

Answer 1

The first step is to calculate the interest that accrues over the 3-month period:

Interest = Principal x Rate x Time

= $4,000 x 0.075 x (3/12)

= $75

The amount due on the loan is the sum of the principal and interest:

Amount due = Principal + Interest

= $4,000 + $75

= $4,075

Rounding to the nearest cent gives: $4,075.00