Question

POSSIBLE POINTS: 16.67Chloe is an avid gymnast. An annual membership at the local gymnasium costs $3,500. She canborrow the money from her bank at 1.25% interest for 3 years. By the end of the loan, how muchmoney will Chloe end up paying the bank for the gym membership?

Answer 1

Chloe borrowed $3,500 at 1.25% interest rate for 3 years. Let's first find the interest on the money she borrowed. This becomes

`\begin{gathered} \text{Simple interest I = }(P* R* T)/(100) \\ \text{Where P = the principal which is the money borrowed = \$3,500} \\ R\text{ = interest rate = 1.25\%} \\ T\text{ = time = 3 years } \\ I\text{ = }(P* R* T)/(100) \\ \\ I\text{ = }(3500*1.25*3)/(100) \\ \\ I\text{ = }(13125)/(100) \\ \\ I\text{ = \$131.25} \end{gathered}`

The interest = $ 131.25. She will pay back an amount of = P + I

Amount = 3500 + 131.25 = $3,631.25