a. Find the monthly payments for a simple interest
amortized loan of $16000 at 7 1/8
% for 7 years.
monthly payment = $
b. Find the total interest for a simple interest amortized loan
of $16000 at 7 1/8
% for 7 years.
total interest = $
To find the monthly payments for a simple interest amortized loan, we can use the formula:
Monthly Payment = Principal * Rate * Time
Given that the principal amount is $16,000 and the rate is 7 1/8% (or 7.125% in decimal form), and the time is 7 years (or 84 months), we can substitute these values into the formula:
Principal = $16,000
Rate = 7.125% or 0.07125 (in decimal form)
Time = 7 years or 84 months
Monthly Payment = $16,000 * 0.07125 * 84
Now let's calculate it:
Monthly Payment = $16,000 * 0.07125 * 84
Monthly Payment = $917.25
Therefore, the monthly payment for a simple interest amortized loan of $16,000 at 7 1/8% for 7 years is $917.25.
Now, let's move on to calculating the total interest for the loan.
To find the total interest, we can use the formula:
Total Interest = (Principal * Rate * Time) - Principal
Given that the principal amount is $16,000, the rate is 7 1/8% (or 7.125% in decimal form), and the time is 7 years (or 84 months), we can substitute these values into the formula:
Principal = $16,000
Rate = 7.125% or 0.07125 (in decimal form)
Time = 7 years or 84 months
Total Interest = ($16,000 * 0.07125 * 84) - $16,000
Now let's calculate it:
Total Interest = ($16,000 * 0.07125 * 84) - $16,000
Total Interest = $101,880 - $16,000
Total Interest = $85,880
Therefore, the total interest for a simple interest amortized loan of $16,000 at 7 1/8% for 7 years is $85,880.