Work each problem. Levada borrows $30,900 from her bank to open a...

Question

Work each problem. Levada borrows $30,900 from her bank to open a florist shop. She agrees to repay the money in 18 months with simple annual interest of 5.5%.
(a)How much must she pay the bank in 18 months?

Accepted Answer

Hello everyone. We're gonna solve this word problem. A meth recently renovated his bathroom which cost him $41,400. He borrowed this amount from a financial institution and the terms of his loan state that he needs to repay the amount in 23 months. At a simple interest rate of 3.8%. We are going to calculate the total amount he owns owes the financial institution. So first recall that the simple interest rate formula we're going to use here the A. Equals P. Times in parentheses one plus R. T. So A. Is going to be the amount he owes at the end. P. Is principle. So the amount he borrowed rate is our interest rate and T. Is time in years. So defining these variables p. Being the principal. So that's the amount he borrowed. So 41,400 Rate his interest rate so is 3.8%. We want to use that as a decimal. So we're going to rewrite that as 0.038. And then time time he said was 23 months But we want this in terms of years. So since there's 12 months in a year we can rewrite this as 23/12 when we're talking about years. So now that we've defined all of our variables, we can put them in our formula. So a equals the principle. So 41,400 times one plus The rate. So 0. Times The time. Just 23/12 and I'm gonna close those parentheses. So to make this usable I'm gonna work on what's inside the parentheses first. So the 41,400 stays put times one plus. And now I got to figure out what I get when I multiply 10.38 times 23rd twelves. And when I multiply that I get zero .07283 and the three keeps going but I'm going to round it there. So continuing on 41, times now. 1.07283. That will give me That gives me 44415.16. So that's how much he'd owe the bank. So now let's look at our answer choices. So the closest answer choice here is d answer choice D. And that's just because I rounded along the way. If they did not round this is what we would get. So we get $44,415.30 is what he owes the bank. Have a good day.

Work each problem. Levada borrows $30,900 from her bank to open a florist shop. She agrees to repay the money in 18 months with simple annual interest of 5.5%. (a)How much must she pay the bank in 18 months?

Key Concepts

Simple Interest Formula

Principal Amount

Time Conversion

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