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The following loan is discounted. Fine (a) the discount, (b) The amount of money received and(c) the true interest rate

The Following Loan Is Discounted Fine A The Discount B The Amount Of Money Received Andc The True Interest Rate class=

Sagot :

Explanation

Given

[tex]\begin{gathered} P=\text{ \$1590} \\ r=7\frac{1}{2}\text{\%} \\ t=3\text{ years} \end{gathered}[/tex]

a) The discounted load can be gotten with the formula below;

[tex]\begin{gathered} I=PRT \\ I=1590\times\frac{7.5}{100}\times3 \\ I=357.75 \end{gathered}[/tex]

Answer: $357.75

b) The amount received is

[tex]Net\text{ amount = P-I=1590 -357.75=1232.25}[/tex]

Answer: 1232.25

c) The true interest rate is

[tex]\begin{gathered} I=PRT \\ 357.75=1232.25\times R\times3 \\ 357.75=3696.75R \\ switch\text{ sides} \\ 3696.75R=357.75 \\ R=\frac{357.75}{3696.75}=0.09677=9.68\text{\%} \end{gathered}[/tex]

Answer: 9.68%

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