solution
Where:
P is the principal amount, $13000.00.
r is the interest rate, 7% per year, or in decimal form, 7/100=0.07.
Assume t is 1....year time periods.
To find the simple interest, we multiply 13000 × 0.07 × 1 to get that:
= 13,000×7÷100 = 910
The interest is: $910.00 for 7% interest rate
Usually now, the interest is added onto the principal to figure some new amount after 1 year(s),
or 13,000.00 + 910.00 = 13910.00.
Where Interest rate is 7/8%
= (13000×7/8 ÷100 = 1024)
= 13,000 + 1024 = 14,024
Hence the interest rate is 7% and 7/8%
The interest will be $910 and $1024 respectively
monthly payment is vary depending upon the interest rate
Interest rate is low means the monthly payment and repayment period is less
Interest rate is high means the monthly payment and repayment period is more