16 September, 17:28

# A company offering short term loans agrees to lend Nick \$1,200. The amount (plus interest) is repayable in one year, and the interest rate is 12% per month. What is the total amount that must be repaid? Give your answer in dollars to the nearest dollar.

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1. 16 September, 20:59
0
The total amount that must be repaid is \$2,928.

Step-by-step explanation:

First, you need to know how much interest Nick will be paying every month.

Provided that he borrowed \$1,200 with a 12% interest rate, then, you can calculate the interest rate per month by multiplying these numbers.

So, \$1,200 * 12% (0.12) = \$144 (interest per month)

In order to get the total amount of interest in one year, you can multiply \$144 with 12 (12 months).

So, \$144 per month * 12 months = \$1,728 (the total amount of interest in 1 year)

In order to get the total amount to be repaid, then you have to add the amount which Nick loaned (\$1,200) plus the total amount of interest in 1 year.

So, \$1,200 + \$1,728 = \$2,928

The total amount that Nick needs to repay is \$2,928.