Question

1. Melissa took out a loan of $50,000 with an interest rate of 2.3% for the start-up of the Math Cafe. How much will she owe the bank if the loan term is for five years? Explain how you got your answer.

Answer 1

$55,750 a

Explanation:

Given Principal P = $50,000

Rate R = 2.3%

Time T = 5 years

Get the interest first

Simple interest = PRT/100

Simple interest = 50,000*2.3*5/100

Simple interest = 500*2.3*5

Simple interest = $5,750

Amount = Principal + Interest

Amount = $50,000 + $5,750

Amount = $55,750

Hence she will owe the bank $55,750 after 5 years