Question

A company offering short term loans agrees to lend Nick $1,200 . The amount (plus interest) is repayable in one year, and the interest rate is 12% per month. What is the total amount that must be repaid? Give your answer in dollars to the nearest dollar. Do not include commas or the dollar sign in your answer. For example if your answer is $1,234.56 enter 1235 .

Answer 1

Correct answers:

$2928$

Explanation:

$2928$

We express the interest r in decimal form, so we have r=12%=12100=0.12. The principal is P0=$1,200, so the interest is I=P0⋅r⋅t=$1,200⋅0.12⋅12=$1,728. The interest paid is $1,728, so the total amount repayable is $1,200+$1,728=$2,928.

Answer 2

The total amount is 1214.4

Explanation:

Given

principal p=$1200

interest rate r= 12%= 12/100= 0.12

time t= 1

n= 12

we know that the compound interest formula is

A=p(1+r/n )^nt

A=1200(1+0.12/12)^1*12

A=1200(1+0.01)^12

A=1200(1.001)^12

A=1200*1.012

A=1214.