Question

Find the total amount owed, to the nearest cent, for a simple interest loan with a principal of $2950, an interest rate of 7.4% and a time period of 1.5 years. Show your work.

Answer 1

Total amount: $3,277.45

Interest: $327.45

Total: 2,950(1 + (0.074 x 1.5)) = 3,277.45

Interest: 3,277.45 - 2,950 = 327.45

Explanation:

Answer 2

Total Accrued Amount = $3,277.45

Interest Amount = $327.45

Explanation:

A = $3,277.45

I = A - P = $327.45

Equation:

A = P(1 + rt)

Calculation:

First, converting R percent to r a decimal

r = R/100 = 7.4%/100 = 0.074 per year.

Solving our equation:

A = 2950(1 + (0.074 × 1.5)) = 3277.45

A = $3,277.45

The total amount accrued, principal plus interest, from simple interest on a principal of $2,950.00 at a rate of 7.4% per year for 1.5 years is $3,277.45.