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Allison borrows $10,500 for4 1 / 2years at a rate of 13.5% simple interest, find the total amount owed

1 Answer

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We would apply the formula for determining simple interest which is expressed as

I = PRT/100

Where

I represents the interest

P represents the principal or amount borrowed

T represents time in years

R represents the interest rate

From the information given,

P = 10500

R = 13.5%

T = 4.5 years

Therefore,

I = 10500 * 13.5 * 4.5/100

I = 6378.75

The total amount owed would be the sum of the interest and the initial amount borrowed

Total amount owed = 10500 + 6378.75 = $16878.75

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