Answer:
Explanation:
The formula for determining simple interest is expressed as
I = PRT/100
Where
I represents interest paid on the loan.
P represents the principal or amount taken as loan
R represents interest rate
T represents the duration of the loan in years.
1) From the information given,
P = cost of gym = $2200
R = 6%
T = 3 years
I = (2200 × 6 × 3)/100 = $395
The total amount that he would pay after 3 years is
2200 + 395 = $2596
If he decides to continue going to the gym, the total amount that the would pay in 3 years(3 × 12 = 36 is
80 × 36 = 2880
Therefore, paying for the gym would cost more. He should take the loan.
2) if she takes the loan, the interest would be
I = (18000 × 7.5 × 5)/100 = $6750
The total amount that she would pay back after 5 years is
6750 + 18000 = $24750
Since the value that would be added to her house is $25000, therefore, she should buy it.
3) if he takes a loan of $1000 at 7% interest for 1 year, the interest would be
I = (1000 × 7 × 1)/100 = $70
The total amount that he would pay back is
1000 + 70 = $1070
If bottled water costs $7 per week and there are 52 weeks in a year, the cost of getting it for a year is
7 × 52 = $364
The difference in the costs after 1 year is
1070 - 364 = $706