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Kim wants to pay off her student loan in the next 4 years. She currently pays $195 at 12% annual interest with a balance of $10,000.
How much more will she have to pay monthly to reach her goal?


Sagot :

ajinems

She would have to pay the sum of $197.91 monthly

Calculation of simple interest

The rate(r) of payment is = 12%

The time(t) to pay off her student loan = 4 years

Simple interest (si) amount = $195

But,

[tex]si = \frac{p \times t \times r}{100} [/tex]

Make p the subject of formula,

[tex]p = \frac{si \times 100}{t \times r} [/tex]

[tex]p = \frac{195 \times 100}{4 \times 12} [/tex]

[tex]p = \frac{19500}{48} [/tex]

p = $406.25

406.25 × 48months (4years)

Kim has to pay $406.25 monthly to achieve the loan of $19500.

But she has the balance of $10,000, therefore the amount of remaining = 19500 - 10000

= $9,500

Therefore, the amount she will pay monthly is = 9500/48

= $197.91

Learn more about simple interest here:

https://brainly.com/question/20690803

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