Question

Mr. Fixit wanted to remodel his business, so he got a loan of $4,300, at a rate of 6 percent interest. He paid this loan off in 8 months. Knowing this, what was the total amount of interest Mr. Fixit paid?
A. $21.50
B. $172
C. $258
D. $358

Answer 1

Answer:

Option B - $172

Step-by-step explanation:

Given : Mr. Fixit wanted to remodel his business, so he got a loan of $4,300, at a rate of 6 percent interest. He paid this loan off in 8 months.

To find : What was the total amount of interest Mr. Fixit paid?

Solution :

Applying compound interest formula,

$A=P+I$

Where, $A=P(1+r)^t$

Here, A is the amount

P is the principal P=$4300

r is the interest rate r=6%

t is the time = 8 months

Substitute the value in the formula,

$A=4300(1+\frac{6}{1200})^8$

$A=4300(1+0.005)^8$

$A=4300(1.005)^8$

$A=4300\times 1.04$

$A=4472$

Now, We find the interest

$4472=4300+I$

$I=4472-4300$

$I=\ 172$

Total amount of interest Mr. Fixit paid is $172.

Therefore, Option B is correct.