Allan borrowed 6500 from his father to buy a car. He repaid him after 4 months with interest of 2% per year. Find the total amount he repaid.
2%/year is .02/12 per month
So, use your normal formula and you get
6500(1 + .02/12)^4
Well, well, well, looks like Allan wanted to cruise around in style! Let's calculate the total amount he repaid, shall we?
First, let's find out how much interest he had to pay for those 4 months. With an interest rate of 2% per year, we can divide it by 12 to get the monthly interest rate: 2% / 12 = 0.16%.
Now, we can calculate the interest amount: 6500 * 0.16% * 4 = $41.60.
Adding the principal amount and the interest together, Allan repaid a total of $6500 + $41.60 = $6541.60.
So, Allan repaid a grand total of $6541.60. The car might not be clown-worthy, but at least he paid his dad back!
To find the total amount Allan repaid, we need to calculate the interest first, then add it to the principal loan amount.
Step 1: Calculate the interest.
Given that the interest rate is 2% per year, and Allan repaid the loan after 4 months, we need to calculate the interest for a 4-month period.
To calculate the interest, use the formula:
Interest = Principal * Rate * Time
Where:
Principal = 6500
Rate = 2% per year = 2/100 = 0.02
Time = 4 months = 4/12 = 1/3 years
Therefore, the interest is:
Interest = 6500 * 0.02 * (1/3)
= 86.67
Step 2: Add the interest to the principal loan amount to find the total amount repaid.
Total amount repaid = Principal + Interest
= 6500 + 86.67
= 6586.67
Therefore, Allan repaid a total amount of $6,586.67.
To find the total amount Allan repaid, we need to calculate the interest he paid on the borrowed amount and add it to the principal.
First, let's calculate the interest Allan paid:
Interest = Principal x Interest Rate x Time
Here, the principal is $6,500 and the interest rate is 2% per year. However, since the interest should be calculated for 4 months, we need to adjust the time accordingly.
Time in years = 4 months / 12 months per year = 1/3 years
Now we can calculate the interest:
Interest = $6,500 x 2% x 1/3 = $43.33
Next, we add the interest to the principal to find the total amount repaid:
Total amount repaid = Principal + Interest
= $6,500 + $43.33
= $6,543.33
Therefore, Allan repaid a total of $6,543.33.