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QuestionCalculate the interest and total amount paid on a \10,550loanat12.25%for3yearsusing10,550 loan at 12.25\% for 3 years using I=Prt$. Round to the nearest dollar.

Studdy Solution

STEP 1

Assumptions1. The principal loan amount, $$, is $\$10,550$ . The interest rate, $r$, is $12.25\%$
3. The time for repayment, $t$, is3 years4. The interest is calculated using the simple interest formula $=Prt$

STEP 2

First, we need to find the interest amount on the loan. We can do this by substituting the given values into the simple interest formula.
=Prt = Prt

STEP 3

Now, plug in the given values for the principal amount, interest rate, and time to calculate the interest.
=$10,550×12.25%×3 = \$10,550 \times12.25\% \times3

STEP 4

Convert the percentage to a decimal value.
12.25%=0.12212.25\% =0.122=$10,550×0.122×3 = \$10,550 \times0.122 \times3

STEP 5

Calculate the interest amount.
=$10,550×0.1225×3=$1,228.38 = \$10,550 \times0.1225 \times3 = \$1,228.38Round the interest to the nearest dollar.
=$1,228 = \$1,228

STEP 6

Now that we have the interest amount, we can find the total amount that needs to be paid back. This includes both the principal amount and the interest.
Total amount=Principal amount+InterestTotal\, amount = Principal\, amount + Interest

STEP 7

Plug in the values for the principal amount and the interest to calculate the total amount.
Total amount=$10,550+$1,228Total\, amount = \$10,550 + \$1,228

STEP 8

Calculate the total amount that needs to be paid back.
Total amount=$10,550+$1,228=$11,778Total\, amount = \$10,550 + \$1,228 = \$11,778Round the total amount to the nearest dollar.
Total amount=$11,778Total\, amount = \$11,778The interest paid is \$1,228 and the total amount paid is \$11,778.

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