A friend lent 17,600 to Dawn W. Monroe, the owner of a comic book store. She repaid the loan at the end of 6 months at 7 1/2% simple interest. What total amount did Dawn pay her friend?

If the term of the loan issued to Dawn W. Monroe, the owner of the comic book store, was 6 months; then the amount paid by Dawn would be 18,920. Calculated as 17,600 times 107.5 percent. (100 percent being the loaned amount, 7.5 percent being the interest amount).

Given that the loan was paid using a simple interest model, then the total amount of interest paid was:

I = (PRT) / 100

I=interest

P=principle=$17600

R=rate=7.5%

T=time=6/12=0.5 years

thus

I = (17600*7.5*0.5) / 100

=$660

Thus the total amount that Dawn paid will be:

Total=Principle+Interest

=17600+660

=$18260