Question

2. Solve the following problems involving simple interest. Recall

Simple Interest-INT=PV*r*t
An investor decides to offer a business owner a $45,000 loan at simple interest of 3.5%
per year. Find the total amount in dollars, the investor will receive when the loan is
repaid after 7 years.

Answer 1

A = $56025

Explanation:

Given that,

An investor decides to offer a business owner a $45,000 loan at simple interest of 3.5% per year.

Principal, P = 45,000

Rate of interest, R = 3.5%

We need to find the total amount the investor will receive when the loan is repaid after 7 years.

The formula for the simple is given by :

`I=(PRT)/(100)\\\\=(45000* 3.5* 7)/(100)\\\\=\$ 11025`

We know that,

Amount = Principal + simple interest

So,

A = 45,000 + 11025

A = $56025

So, the required amount is equal to $56025.