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Sagot :
Using simple interest, and considering a loan of $5,000, it is found that:
a) Her monthly payment is of $74.17.
b) She will pay back $8,900.
c) The total interest amount is of $3,900.
The amount of money after t years in simple interest is modeled by:
[tex]A(t) = A(0)(1 + rt)[/tex]
In which:
- A(0) is the initial amount.
- r is the interest rate, as a decimal.
In this problem:
- The loan is of $5,000, hence [tex]A(0) = 5000[/tex].
- The APR is of 7.8%, hence [tex]r = 0.078[/tex]
- 10 years, hence [tex]n = 10[/tex]
Item b:
[tex]A(10) = 5000[1 + 0.078(10)] = 8900[/tex]
She will pay back $8,900.
Item a:
$8,900 will be paid in 10 x 12 = 120 months, hence:
[tex]M = \frac{8900}{120} = 74.17[/tex]
Her monthly payment is of $74.17.
Item c:
Loan of $5,000, pays back $8,900, hence:
8900 - 5000 = 3,900
The total interest amount is of $3,900.
A similar problem is given at https://brainly.com/question/13176347
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