Question

QUESTION 2 of 10: New shoes are on SALE. You find a pair you like for $85 dollars. But you only have $45 with you. So, you pay $40 and charge the balance. At 8% interest, what will the balance owed be in six months? (Assume no payments made and simple interest.)

Answer 1

Answer:

The balance amount owned in six months is $ 46.8

Explanation:

Given as :

The price of new shoes = $85

The amount paid for the shoes  = $ 40

The balance amount for the shoes = $85 - $40 = $ 45

The rate of interest = 8%  

the time period = 6 months = 0.5 years

From simple method

Simple interest = $(\frac{\textrm principal\times \textrm rate \times \textrm time}{100})$

or, Simple interest = $(\frac{\textrm 45\times \textrm 8 \times \textrm 0.5}{100})$

Or, Simple interest = $\frac{180}{100}$ = $1.8

So, Amount = Principal + Interest

or, Amount = $45 + $1.8 = $ 46.8

Hence The balance amount owned in six months is $ 46.8   Answer