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Ally is buying a speed boat for $10,000 with a down payment of $2,500. The bank approved a simple interest flat rate loan for 5 years at 7% APR. How much are the monthly loan payments? (round to the nearest cent)
A) $157.50
B) $168.75
C) $180.00
D) $191.25

Sagot :

lizzysanc154

Answer  B. $168.75

Step-by-step explanation:

I took the test and I got it correct and I will tell you guys the other answers if you have these same questions.

1) Scott invests $1000 at a bank that offers 6% compounded annually. Write an equation to model the growth of the investment.

Answer: D) A = 1000(1.06)t

2) Find the maturity value of a loan of $2500 at simple interest that is to be repaid in 8 months. The interest rate is 4.3%.

Answer: B) $2571.67

3) Owen has a loan for $3700 at a rate of 5% annually. If the interest is not compounded, what is the total amount of repayment if the loan is for 7 years?

Answer: D) $4995.00

4) Davis puts $5,000 each year in an account that earns 5% annual interest, compounded annually. His brother Mike puts $5,000 each year in a safe in his bedroom. After the first 10 years of doing this, how much more money does Davis have than Mike? Round your answer to the nearest dollar.

Answer: A) $20,524

5) Ally is buying a speed boat for $10,000 with a down payment of $2,500. The bank approved a simple interest flat rate loan for 5 years at 7% APR. How much are the monthly loan payments? (round to the nearest cent)

Answer: B) $168.75

The monthly loan payments should be [tex]\$168.75[/tex].

Option B is correct.

Simple interest :

Given that, Ally is buying a speed boat for $10,000 with a down payment of $2,500.

Remaining amount Ally have to pay,

                                      [tex]=10000-2500=7500[/tex]

Rate of interest [tex]r=7\%[/tex] , time [tex]t=5[/tex] years and Principal [tex]P=7500[/tex]

          Simple interest,  [tex]S.I=\frac{P*r*t}{100}[/tex]

                          [tex]S.I=\frac{7500*7*5}{100} \\\\S.I=2625[/tex]

In 5 years, Ally have to pay,

                                 [tex]=7500+2625=10125[/tex]

In one month, Ally have to pay [tex]=\frac{10125}{60}=\$168.75[/tex]

Learn more about the simple interest here:

https://brainly.com/question/2294792

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