Question

The Jones family wants to remodel their kitchen. They have saved in the last two years. Their contractor says the remodel will cost. They can borrow the difference at a monthly interest rate of simple interest. If they pay the loan off in six months, how much will they have paid?

Answer 1

Jones family will pay $19,040

Explanation:

The question is not complete;

The complete question is as follows;

The Jones family wants to remodel their kitchen. They have saved $23,000 in the last two years. Their contractor says the remodel will cost $40,000. They can borrow the difference at a monthly interest rate of 2% simple interest. If they pay the loan off in six months, how much will they have paid

Solution

The amount they are seeking to borrow is; $40,000 - $23,000 = $17,000

We can now remodel the question to be; what amount would be paid back by he Jones family if they borrow $17,000 at an interest rate of 2% monthly for a total of six months.

To answer this, the formula to use is the simple interest formula

Mathematically

I = PRT/100

where P is the principal amount of $17,000

R is the rate at 2%

and T is the time at 6 months

Let us plug these values;

I = (17,000 × 2 × 6)/100 = $2040

Thus, the amount to be paid back is P + I ( principal + interest) = 2040 + 17,000 = $19,040