A bank offers simple interest rate of 8 % on home improvement loans. Tania borrows $17.000 for 2 years. How much interest did he pay? What is the total amount he must pay back at the end of the 2 years?

Question

Mathematics

Ulises

16 January, 04:06

A bank offers simple interest rate of 8 % on home improvement loans. Tania borrows $17.000 for 2 years. How much interest did he pay? What is the total amount he must pay back at the end of the 2 years?

+5

Answers (1)

Know the Answer?

Leah Donaldson · Answer 1

Equation:

A = P (1 + rt) = $ 2'720 interest

Step-by-step explanation:

A = $19,720.00

(I = A - P = $2,720.00)

Calculation:

First, converting R percent to r a decimal

r = R/100 = 8%/100 = 0.08 per year.

Solving our equation:

A = 17000 (1 + (0.08 * 2)) = 19720

A = $19,720.00

The total amount accrued, principal plus interest, from simple interest on a principal of $17,000.00 at a rate of 8% per year for 2 years is $19,720.00 - 17000 = 2720