The annual interest rate for a customer’s loan of $425 is 15.75%. What is the total dollar amount to be repaid on the loan, including principle and interest, for the entire year?
I = PRT
425 = P * 0.1575 * 1
Solve for P.
To calculate the total dollar amount to be repaid on the loan, including principal and interest, you can use the formula for calculating simple interest:
Total Amount = Principal + Interest
The principal in this case is the loan amount, which is $425.
To find the interest amount, you need to calculate 15.75% of the loan amount. To do this, you multiply the loan amount by the interest rate expressed as a decimal.
Interest Amount = Principal × Interest Rate
Interest Amount = $425 × 15.75% (or 0.1575)
Multiply these two values together:
Interest Amount = $425 × 0.1575
The result is the interest amount.
To find the total amount to be repaid, you need to add the principal and the interest together:
Total Amount = Principal + Interest
Total Amount = $425 + interest amount
By substituting the value of the interest amount into the equation, you can calculate the total amount to be repaid.