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Part 1
Tony opened a hot dog stand last April. He borrowed $5800 to pay for the stand and startup inventory, and he agreed to pay off the loan in 10 months at 7% simple interest. Find the total amount required to repay the loan.
To find the total amount required to repay the loan, we need to calculate the interest on the loan first.
The formula for simple interest is: Interest = Principal * Rate * Time
In this case, the principal is $5800, the rate is 7% (or 0.07), and the time is 10 months.
Thus, Interest = $5800 * 0.07 * 10 = $4060
The total amount required to repay the loan is the sum of the principal and the interest.
Total amount = Principal + Interest = $5800 + $4060 = $9860
Therefore, the total amount required to repay the loan is $9860.
To find the total amount required to repay the loan, we need to calculate the simple interest.
First, we need to find the interest amount. We can use the formula:
Interest = Principal × Rate × Time
Where:
Principal = $5800 (the borrowed amount)
Rate = 7% (or 0.07 in decimal form)
Time = 10 months
Plugging in the values, we have:
Interest = $5800 × 0.07 × 10
Now, let's calculate the interest:
To find the total amount required to repay the loan, we need to calculate the amount of interest and add it to the principal borrowed.
Step 1: Calculate the interest using the simple interest formula:
Interest = Principal * Rate * Time
Given:
Principal (P) = $5800
Rate (R) = 7% = 0.07 (in decimal)
Time (T) = 10 months
Interest = $5800 * 0.07 * 10
Interest = $4060
Step 2: Add the interest to the principal borrowed:
Total amount to repay the loan = Principal + Interest
Total amount = $5800 + $4060
Total amount = $9860
Therefore, the total amount required to repay the loan is $9860.