If you purchase an item for 1,272 at an interest rate of 9.8%, and you finance it for 1 year, how much is the amount of add -on interest?(round your answer to nearest dollar.)
1272 * 0.098 = $124.656 = $124.66
To calculate the amount of add-on interest, we need to find the simple interest.
First, convert the interest rate of 9.8% to a decimal by dividing it by 100: 9.8% / 100 = 0.098.
Next, calculate the simple interest using the formula: simple interest = principal × rate × time.
Principal = $1,272
Rate = 0.098 (9.8% as a decimal)
Time = 1 year
Simple interest = $1,272 × 0.098 × 1
Simple interest = $124.89
Round the amount of add-on interest to the nearest dollar, which in this case is $125.
To calculate the amount of add-on interest, you need to know the principal amount, interest rate, and the financing period.
In this case, the principal amount is $1,272, the interest rate is 9.8%, and the financing period is 1 year.
First, convert the interest rate to a decimal by dividing it by 100: 9.8% / 100 = 0.098.
Next, multiply the principal amount by the interest rate and the financing period: $1,272 * 0.098 * 1 = $124.656.
Since the question asks for the answer to be rounded to the nearest dollar, rounding $124.656 gives a final answer of $125.
Therefore, the amount of add-on interest is approximately $125.