Question

On a loan of $32,000 at 7% interest for 6 months, how much do you wind up paying to pay off the loan?.

Answer 1

The amount to be paid at the end of the loan period will be $33,120. The rate of interest on the loan is given as per annum and hence the interest is to be calculated for 6 months.

Calculation of settlement amount of loan:

Given:

$\rm Principal &= \ 32,000\\\\Rate &= 7\%\:per\:annum\\\\Tenure = 6\:months$

Interest is calculated from the following formula:

$\rm Interest = Principal\times Rate \times Tenure$

Hence the interest for the loan will be:

$\begin{aligned}\rm Interest &= \ 32,000\times 7\% \times 6\: months\\\\&= 32,000 \times \dfrac{7}{100}\times \dfrac{6}{12}\\\\&= \ 1,120\end$

The final payment for the loan will be the combination of principal and interest.

Therefore final payment = $32,000 +$1,120

                                        = $33,120

Learn more about the topic here:

brainly.com/question/2284847