Question

Adam borrowed $5,600 from the bank. The bank charges 4.2% simple interest each year.

Which equation represents the amount of money in dollars, x, Adam will owe in one year, if no payments are made?

x=5,600+5,600(42)(12)
x=5,600+5,600(0.042)(1)
x=5,600+5,600(42)(1)
x=5,600+5,600(0.042)(12)

Answer 1

`x = 5600 + 5600 * 0.042 * 1`

Explanation:

Given

`P = 5600` -- Principal

`R = 4.2\%` -- Rate

`T = 1` -- Time

Required

The amount (x) to be paid

This is calculated as:

`x = P + I`

Where:

`I = PRT`

So, we have:

`x = 5600 + 5600 * 4.2\% * 1`

Express percentage as decimal

`x = 5600 + 5600 * 0.042 * 1`

(c) is correct