The owners of a marina bought 8 canoes to be used as rentals at a cost of $800 per canoe. They borrowed 70% of the total cost for 7 months at 12 1/2% interest. Find the amount due using simple interest.
The amount due is $:
(Round to the nearest cent as needed.)
Like I mention on the other questions I’ve asked I don’t want the answer I just need some help getting there and how to get there I will post the answer for others after if it is correct.
Answer: 4806.67
To find the amount due using simple interest, we can use the formula:
Amount Due = Principal + (Principal * Rate * Time)
First, we need to calculate the principal, which is the amount borrowed. Since the owners borrowed 70% of the total cost, and the total cost is the cost of 8 canoes, we have:
Principal = 70% of (8 * $800)
Principal = 0.70 * 8 * $800
Next, we need to calculate the rate. The rate is given as 12 1/2%, which can be written as a decimal by dividing 12.5 by 100:
Rate = 12.5 / 100
Finally, we need to calculate the time, which is given as 7 months.
Now we can substitute the values into the formula and calculate the amount due.
To find the amount due using simple interest, we'll need to calculate the interest on the borrowed amount and then add it to the principal.
First, let's calculate the amount borrowed. Since the owners borrowed 70% of the total cost, we'll need to find 70% of the cost of the canoes.
Cost of one canoe = $800
Number of canoes = 8
Total cost of the canoes = Cost of one canoe × Number of canoes
= $800 × 8
= $6400
Amount borrowed = 70% of the total cost
= 70/100 × $6400
= $4480
Next, let's calculate the interest on the borrowed amount. We'll use the simple interest formula:
Interest = Principal × Rate × Time
In this case, the rate is given as 12 1/2%, which can be converted to decimal form by dividing by 100:
Rate = 12.5 ÷ 100
= 0.125
The time is given as 7 months.
Interest = $4480 × 0.125 × 7
Finally, we can calculate the amount due by adding the interest to the principal:
Amount due = Principal + Interest
Make sure to round the answer to the nearest cent as requested.
I hope this explanation helps you in getting the answer.