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Denise borrowed $1,245 to pay for a cruise. The interest rate she agreed to pay is 3.5%. If she takes 11 months to pay back the loan, how much will she owe?

1 Answer

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Answer: The amount that she would owe is $1284.94

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.

From the information given,

P = $1245

R = 3.5%

T = 11 months. Converting to years, it becomes 11/12 year

Therefore,

I = (1245 × 3.5 × 11)/12 × 100

I = 47932.5/1200 = $39.94

The amount that she would owe after 11 months is

1245 + 39.94 = $1284.94

User Martin Larsson
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