contestada

JOHN RICHARDS BORROWED $875 AGAINST HIS CHARGE ACCOUNT ON SEPTEMBER
12 AND REPAID THE LOAN ON OCTOBER 14 (32 DAYS LATER). IF THE INTEREST RATE
IS 0.04273% PER DAY, HOW MUCH INTEREST DID JOHN PAY ON THE LOAN AND WHAT
AMOUNT DID HE PAY THE BANK WHEN HE REPAID THE LOAN

Respuesta :

Using simple interest, it is found that:

  • John paid $12 in interest for the loan.
  • The total amount that he paid the bank was of $887.

Simple Interest

Simple interest is used when there is a single compounding per time period.

The amount of money after t units of time in is modeled by:

[tex]A(t) = A(0)(1 + rt)[/tex]

In which:

  • A(0) is the initial amount.
  • r is the interest rate, as a decimal.

For this problem, the parameters are given as follows:

A(0) = 875, r = 0.0004273, t = 32.

Hence the amount paid is given by:

A(32) = 875 x (1 + 0.0004273 x 32) = $887.

The amount of interest is given by:

I = 887 - 875 = $12.

More can be learned about simple interest at https://brainly.com/question/25296782

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