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

C: $2,970

Question 2

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

B: $11,337

Question 3

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

Revolt · Accepted Answer

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

Simple Interest Answers

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