Question

Henry takes out a $650 discounted loan with a simple interest rate of 12% for a period of 7 months. How much money does Henry receive into his bank account when the loan is drawn down? Give your answer to the nearest cent.

Answer 1

Answer:

$546

Step-by-step explanation:

Given

Amount, P = $650

Rate, R = 12%

Period, T = 7 months

Required

Determine the amount paid.

We'll solve this using simple interest formula, as thus

$I = \frac{PRT}{100}$

Substitute values for T, R and P

$I = \frac{\ 650 * 12 * 7}{100}$

$I = \frac{\ 54600}{100}$

$I = \ 546$

Hence, Henry's withdrawal is $546