Question

Next questionA man uses a loan program for small businesses to obtain a loan to help expand his vending machine business. The man borrows $27,000 for 3 years with a sirinterest rate of 1.5%. Determine the amount of money the man must repay after 3 years.The man must repay

Answer 1

Simple interest formula (not compound interest formula) is used here, as much as i know.

the formula is:

f = p * (1 + r * n).

f is the future value

p is the present value

r is the interest rate per time period

n is the number of time periods

Given

`\begin{gathered} P=27000 \\ r=1.5\%=(1.5)/(100)=0.015 \\ n=3years \end{gathered}`

Therefore, we have

`f=27000(1+0.015*3)=\text{ \$}28215`

Hence, the answer is

`\begin{equation*} \text{\$}28215 \end{equation*}`