Simple Interest

Question 1

Use the formula for simple interest.A=(P)(r)(t)Remember, A refers to the interest accrued.Calculate the total interest Tom would pay, in addition to paying back his $9,000 in principal.

Revolt · Accepted Answer

$2,970

Question 2

What did you include in your answer? Check any that apply.

Revolt · Accepted Answer

the fact that the compound interest loan will require a smaller total repayment; the fact that the simple interest loan has a rate that is too high

Question 3

Use the formula for annual compound interest.A = P (1 + )ntRemember, A refers to the total amount owed.Calculate the total amount that Tom would repay.

Revolt · Accepted Answer

$11,337

Question 4

Make a recommendation to Tom. Which loan should he use?

Revolt · Accepted Answer

Tom should choose loan option B. Even though it uses compound interest, it requires a smaller total repayment than the simple-interest loan, whose rate is too high.

Question 5

If Claire does not make any payments, how much will she owe after ten years?

Revolt · Accepted Answer

$12,136.67

Question 6

Zachary's student loans are an example of what type of loan?

Revolt · Accepted Answer

unsecured loan

Question 7

How can Elizabeth most responsibly pay off her bill sooner?

Revolt · Accepted Answer

pay more than the minimum payment each month

Question 8

What steps can an individual take to improve a credit score? Check all that apply.

Revolt · Accepted Answer

make all loan payments on time; check credit reports for accuracy; avoid opening credit accounts that are not needed; keep balances low

Question 9

How does the decision to make a down payment benefit Jordan’s financial situation?

Revolt · Accepted Answer

It reduces the loan amount and the monthly payments.

Simple Interest Answers

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