Question

Judy Clark went to Reel Bank. She borrowed $7,800 at a rate of 6 1/2%. The date of the loan was September 2. Judy hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Judy will pay back on January 20: ____________

Answer 1

Answer:

$7995.85

Step-by-step explanation:

We will use simple interest formula to solve our given problem.

$A=P(1+rt)$, where,

A = Amount after t years,

P = Principal amount,

r = Annual interest rate in decimal form,

t = Time in years.

$r=6.5\%=\frac{6.5}{100}=0.065$

$t=\text{141 days}=\frac{141}{365}\text{ year}$

$A=\ 78001+0.065\times \frac{141}{365})$

$A=\ 7800(1+0.065\times 0.38630136986)$

$A=\ 7800(1+0.025109589041)$

$A=\ 7800(1.025109589041)$

$A=\ 7995.85479$

$A\approx \ 7995.85$

Therefore, Judy will will pay back on January 20: $7995.85.