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

(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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