The average cost for a vacation is $1,050 if a family borrows money for the vacation at an interest rate of 11.9% for 6 months what is the total cost of the vacation including the interest on the loan
To find the total cost of the vacation including the interest on the loan, you need to calculate the interest amount first and then add it to the initial cost of the vacation.
To calculate the interest amount on the loan, you can use the formula:
Interest = Principal * Rate * Time
In this case, the principal is the average cost of the vacation ($1,050), the rate is the interest rate (11.9%), and the time is the loan duration in years. Since the loan duration is 6 months, you need to convert it to years by dividing it by 12 (as there are 12 months in a year).
Using the formula, you can calculate the interest on the loan as follows:
Interest = $1,050 * 0.119 * (6/12)
= $1,050 * 0.119 * 0.5
= $62.815
So, the interest on the loan is approximately $62.815.
To find the total cost of the vacation including the interest, you simply need to add the initial cost of the vacation to the interest amount:
Total Cost = Initial Cost + Interest
= $1,050 + $62.815
= $1,112.815
Therefore, the total cost of the vacation, including the interest on the loan, is approximately $1,112.82.