Question

Find the total amount of money​ (maturity value) that the borrower will pay back on a loan of ​$1 comma 760 at 13 and one half % simple interest for 10 years.

Answer 1

Answer:

The borrower will pay back $4,136.

Step-by-step explanation:

This is a simple interest problem.

The simple interest formula is given by:

$E = P*I*t$

In which E are the earnings, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.

After t years, the total amount of money is:

$T = E + P$.

In this question:

Loan amount of 1760, so $P = 1760$

Interest rate of 13 and one half, so 13.5%. This means that $I = 0.135$.

10 years, so $t = 10$

Interest on the Loan:

$E = P*I*t = 1760*0.135*10 = 2376$

Total amount:

$T = E + P = 2376 + 1760 = 4136$

The borrower will pay back $4,136.