You visited your local bank. Because of your good credit, they agreed to give you a personal loan, simple interest at a current interest rate of 12.5% APR. you will pay this back in 1 year
Interest=prt=
Total Payment =Principle +interest =
Payment per month= total payment/12=
To calculate the interest, we have the formula "Interest = Principal * Rate * Time", where Principal (P) is the initial amount borrowed, Rate (r) is the interest rate, and Time (t) is the length of time in years.
In this case, your principal is the amount you borrowed, and since it's a personal loan, let's assume it's $10,000.
Next, we need to convert the Annual Percentage Rate (APR) to a decimal form. The APR is given as 12.5%, so we divide that by 100 to get 0.125.
Now, the time is given as 1 year, so we plug in these values into the formula:
Interest = Principal * Rate * Time
= $10,000 * 0.125 * 1
= $1,250
So, the total interest you will pay on the loan is $1,250.
To calculate the total payment, we need to add the principal and the interest together:
Total Payment = Principal + Interest
= $10,000 + $1,250
= $11,250
Therefore, the total payment after one year will be $11,250.
Lastly, to calculate the monthly payment, we divide the total payment by the number of months (12 in this case):
Payment per month = Total Payment / Number of Months
= $11,250 / 12
≈ $937.50 (rounded to the nearest cent)
So, your monthly payment will be approximately $937.50.