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 %
1 answer:
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:
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:
.
In this question:
Loan amount of 1760, so
Interest rate of 13 and one half, so 13.5%. This means that .
10 years, so
Interest on the Loan:
Total amount:
The borrower will pay back $4,136.
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