Elementary Technical Mathematics

Published by Brooks Cole
ISBN 10: 1285199197
ISBN 13: 978-1-28519-919-1

Chapter 1 - Section 1.16 - Application Involving Percent: Business and Personal Finance - Exercises: 1

Answer

(a) interest = $\$300$ (b) $\$63.89$ per month

Work Step by Step

(a) Find the interest using the formula $I=Prt$ where $P$=principal loan amount, $r=$annual interest rate, and $t$=time in years. $I=\$2000 \times 5\% \times 3 \\=\$2000 \times 0.05 \times 3 \\=\$300$ (b) Find the monthly payment using the formula $\text{payment amount} = \dfrac{\text{principal + interest}}{\text{loan period in months}}$. monthly payment $= \dfrac{\$2000 + \$300}{3(12)} \\=\dfrac{\$2300}{36} \\=\$63.\overline{8} \\\approx\$63.89$
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