Question

She could borrow $2500 at a monthly interest rate of 4% simple interest and pay the total after 12 months. Write a simple-interest expression and calculate what she would owe at the end of 12 months.

Answer 1

She would owe $3,700 at the end of 12 month.

Explanation:

Simple interest formula:

`I=Prt`

`I`= Interest

P=principal

r= Rate of interest

t=time

Given that, she could borrow $2,500. So P=$2,500.

The rate 4%=0.04 per month and time t= 12 months.

The interest
`I` = $(2,500×0.04×12)

=$1,200

Amount = principal+ Interest

=$(2,500+1,200)

=$3,700

She would owe $3,700 at the end of 12 month.