Paul borrowed $2,000 for four months at an annual interest rate of
10.25%. How much must he repay at the end of four months?
Principal plus interest after four months is:
$2000 + (4/12)*(0.1025)*(2000)
= $2068.33
It could be a bit more if monthly interest was being added to prinipal due. There could also have been late payment penalties. A loan that requires no payment for 4 months is unusual.
To calculate the amount Paul must repay at the end of four months, we need to calculate the interest on the loan.
First, let's calculate the interest for four months. The formula for calculating simple interest is:
Interest = Principal * Rate * Time
In this case, the principal (P) is $2,000, the rate (R) is 10.25% (0.1025 as a decimal), and the time (T) is four months.
Interest = 2000 * 0.1025 * 4 = $820
Therefore, the interest on the loan for four months is $820.
To find the total amount Paul must repay, we add the interest to the principal:
Total Amount = Principal + Interest = $2000 + $820 = $2820
Therefore, Paul must repay $2,820 at the end of four months.
To find out how much Paul must repay at the end of four months, we need to calculate the interest on the loan using the formula:
Interest = Principal * Rate * Time
Where:
Principal is the amount borrowed
Rate is the annual interest rate
Time is the duration of the loan in years (converted from months in this case)
First, let's convert the duration of the loan from months to years:
Time = 4 months รท 12 months/year = 0.33 years
Now, we can calculate the interest:
Interest = $2,000 * 10.25% * 0.33 years
To calculate the interest, we need to convert the interest rate from a percentage to a decimal by dividing it by 100:
Interest = $2,000 * 0.1025 * 0.33
= $67.65
Finally, to find out how much Paul must repay at the end of four months, we need to add the interest to the principal amount borrowed:
Amount to Repay = Principal + Interest
= $2,000 + $67.65
= $2,067.65
Therefore, Paul must repay $2,067.65 at the end of four months.