Question

You take out a 7 month, $6,000 loan at 8% annual simple interest. How much would you owe at the end of 7 months?

Answer 1

Answer: $6280

Explanation:

7-month: $6000

rate: 8% annual

First find how much is 7 months out of 12 months (because a year has 12 months and this is annual interest)

Take the amount of months that you're trying to calculate and divide by 12.

`(7)/(12)=0.583`

Also convert 8% to decimals. You can do this by dividing by 100.

`(8)/(100)=0.08`

To calculate the interest, simply multiply the amount (6000) times the percentage (0.08) times the amount of months in decimal form (0.583).

(6000)(0.08)(0.583)

$279.84 or ≅ $280.00

Having found the interest, simply add it to the original amount (6000)

6000+280= $6280