Tony opened a hot dog stand last April. He borrowed $6500 to pay for the stand and startup inventory, and he agreed to pay off the loan in 8 months at 8% 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 and add it to the principal amount borrowed.
The formula for calculating simple interest is:
Interest = Principal × Rate × Time
Where:
Principal = $6500
Rate = 8% (written as a decimal, 0.08)
Time = 8 months
Let's calculate the interest:
Interest = $6500 × 0.08 × 8 = $4160
Now, let's calculate the total amount required to repay the loan:
Total amount = Principal + Interest
Total amount = $6500 + $4160
Total amount = $10,660
Therefore, the total amount required to repay the loan is $10,660.
To find the total amount required to repay the loan, we need to calculate the interest and add it to the principal.
Step 1: Calculate the interest amount.
Interest = Principal * Rate * Time
Interest = $6500 * 0.08 * 8/12 (converting months to years)
Step 2: Calculate the total amount required to repay.
Total amount = Principal + Interest
Let's calculate the interest first:
Interest = $6500 * 0.08 * 8/12
Interest = $346.67 (rounded to the nearest cent)
Now let's calculate the total amount required to repay:
Total amount = $6500 + $346.67
Total amount = $6846.67
Therefore, the total amount required to repay the loan is $6846.67.
To find the total amount required to repay the loan, we need to calculate the accumulated interest along with the principal amount.
The formula to calculate simple interest is:
Interest = Principal x Rate x Time
First, let's calculate the interest for 8 months:
Principal: $6500
Rate: 8% (converted to decimal form, 8 ÷ 100 = 0.08)
Time: 8 months
Interest = $6500 x 0.08 x 8
To simplify this calculation, we can calculate the product first, and then multiply:
Interest = $520 x 8
Interest = $4160
The total amount required to repay the loan includes both the principal and the interest:
Total Amount = Principal + Interest
Total Amount = $6500 + $4160
Total Amount = $10,660
Therefore, the total amount required to repay the loan is $10,660.