Calculate the simple interest on a $20,000 loan at an interest rate of 8 percent after 5 years.(1 point)
$800,000
$800,000
$80,000
$80,000
$1,600
$1,600
$8,000
The formula to calculate simple interest is:
Interest = Principal × Rate × Time
In this case, the principal (P) is $20,000, the rate (R) is 8% (0.08 as a decimal), and the time (T) is 5 years.
Using the formula:
Interest = $20,000 × 0.08 × 5
Interest = $8000
Therefore, the simple interest on a $20,000 loan at an interest rate of 8 percent after 5 years is $8,000.
Calculate the amount to be paid back after three years on a $3,000 credit card loan with an interest rate of 15% compounded yearly. (1 point)
Responses
$4,562.63
$4,562.63
$4,271.48
$4,271.48
$267,572.61
$267,572.61
$3,138.08
To calculate the amount to be paid back after three years on a $3,000 credit card loan with an interest rate of 15% compounded yearly, we need to use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = the amount to be paid back after three years
P = the principal loan amount, $3,000
r = the annual interest rate, 15% (0.15 as a decimal)
n = the number of times interest is compounded per year, 1 (since it's compounded yearly)
t = the number of years, 3
Using the formula:
A = 3000(1 + 0.15/1)^(1 * 3)
A = 3000(1 + 0.15)^3
A = 3000(1.15)^3
Calculating the result:
A = 3000(1.15)(1.15)(1.15)
A = 3000(1.15^3)
A ≈ 3000(1.460875)
A ≈ 4382.63
Therefore, the amount to be paid back after three years on a $3,000 credit card loan with a 15% interest rate compounded yearly is approximately $4,382.63.
not a choice
Apologies for that. Let's calculate again.
The correct answer should be $3,138.08.
Using the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = amount to be paid back after three years
P = principal loan amount, $3,000
r = annual interest rate, 15% (0.15 as a decimal)
n = number of times interest is compounded per year, 1 (compounded yearly)
t = number of years, 3
Using the formula:
A = 3000(1 + 0.15/1)^(1 * 3)
A = 3000(1 + 0.15)^3
A = 3000(1.15)^3
Calculating the result:
A = 3000(1.15)(1.15)(1.15)
A ≈ 3000(1.487)
A ≈ 4461
Therefore, the amount to be paid back after three years on a $3,000 credit card loan with a 15% interest rate compounded yearly is approximately $4,461.