Question

10. Richard made $7840 in interest after seven years at a 7% simple interest rate. How much money did Richard initially deposit, to the nearest dollar?

11. If a home loan of $240,000 was paid off in 30 years and the homeowners ended up paying a total of $528,000 total. If the loan and simple interest what is the percentage rate that was used on a home loan?
12. if you wanted to earn $845 and simple interest on a 60 month loan of $1000 what rate would you need?

Answer 1

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Answer:

10. $16,000

11. 4%

12. 16.9%

Explanation:

10. The amount of the loan plus interest is given by the formula ...

I = Prt

P = I/(rt) = $7840/(0.07×7) = $16,000

Richard initially deposited $16,000.

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11. The total of principal plus interest is ...

A = P(1 +rt)

Solving for r gives ...

r = (A -P)/(Pt) = (528000 -240000)/(240000×30) = 0.04 = 4%

The percentage rate used was 4%.

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12. The interest formula is ...

I = Prt

Solving for r gives ...

r = I/(Pt) = $845/($1000×5) . . . . . . 60 months = 5 years

r = 0.169 = 16.9%

To earn $845 in interest, you would need a rate of 16.9%.