Question

I don't care about getting the answers but rather a step-by-step explanation for this problem: A simple interest, 8-month loan of $3,000 has an annual interest rate of 9.3%. Determine the following values. (For the first answer blank, enter an exact number. For the second answer blank, enter a number. For the third answer blank, enter an exact number as an integer, fraction, or decimal.)

P = $

r =

t =


Find the amount of interest paid (in dollars) on this loan. (Enter an exact number.)

I = $


Calculate the maturity value (in dollars) of this loan. (Enter an exact number.)

$

Answer 1

Explanation:

The formula for simple interest is expressed as

I = PRT/100

Where

P represents the principal

R represents interest rate

T represents time in years

I = interest after t years

From the information given

T = 8 months = 8/12 = 2/3 years

P = $3000

R = 9.3%

Therefore

I = (3000 × 9.3 × 2/3)/100

I = 18600/100

I = $186

The maturity value (in dollars) of this loan would be

3000 + 186 = $3186