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i=Prt A=P+Prt 1n The principal on a simple interest loan in S650, the interest r

ID: 3361081 • Letter: I

Question

i=Prt A=P+Prt 1n The principal on a simple interest loan in S650, the interest rate is 6 %, and the loan is made for a period of 4 years. What is the simple interest on the loan? How much will you need to pay back in 4 years? 2. Suppose that the terms on the above loan are changed so that the rate is still 6%, but the loan was made June 1, 2011 and to be repaid September 31, 2012. How much will you need to pay back on 9/31/12? 3. What was the original principal for an 8% simple interest bank account that holds S4340 after 3 years? 4 AS650 loan isto berpaidin 4 years with an interest rate of8% compounded yearly. What total amount will be due in 4 years? 4b. The interest is the difference between your principal (borrowed) and how much you paid altogether. How much interest will you pay? (be careful: it's NOT i-Prt) 5. Repeat Problem #4, with the interest compounded monthly, what total amount will be due in 4 years? 5b.. How much of this is interest?

Explanation / Answer

Question 1:

Here, we are given that R = 6% as the simple interest rate. P = 650 is the principal amount. T = 4 years is the loan period.

The simple interest here is computed as:

SI = PRT = 650*0.06*4 = 156

Therefore $156 is the simple interest on the loan here.

The amount to pe paid back after 4 years is computed as:

A = P + SI = 650 + 156 = $806

Therefore $806 is the amount that should be paid after 4 years.