Leroy borrowed $8250 to be repaid after 3 years at an annual simple interest rate of 7.25%. How much interest will be due after 3 years? How much will Leroy have to repay?
How do I set this up?
I = PRT
I = 8250 * 0.0725 * 3
I = ?
ms. sue! can your go back on my question and help me?!!
For my answer so got $1794.38. Is this correct?
Yes. That's right.
Thank you.
You're welcome.
To set up this problem, you need to first determine the formula for calculating simple interest. Simple interest is calculated using the formula:
Interest = Principal × Rate × Time
Where:
- Principal is the initial amount borrowed or invested ($8250 in this case).
- Rate is the annual interest rate (7.25% or 0.0725 as a decimal).
- Time is the number of years (3 years in this case).
Using this formula, you can calculate the amount of interest due after 3 years:
Interest = Principal × Rate × Time
= $8250 × 0.0725 × 3
To calculate the total amount to be repaid, you need to add the interest to the principal:
Total Repayment = Principal + Interest
To find the total amount Leroy will have to repay after 3 years, you can substitute the values into the formula:
Total Repayment = $8250 + ($8250 × 0.0725 × 3)
Simplifying the above equations will give you the answers to your questions.