Question

Dr. Zuniga is thinking about retirement and decided a to sail around the world once he’s retires.he buys a sailboat for $125,000. He borrows the money at the APR OF 7.5% for 5 years . What will his total interest be

Answer 1

$46875.

Explanation:

We have been given that Dr. Zuniga buys a sailboat for 125000. He borrows the money at an APR of 7.5% for five years.

We will find total interest after 5 years by using simple interest formula.

, where,

A= Amount after T years.

P= Principal amount.

r= The annual interest rate (in decimal form).

T= Time in years.

First of all we will convert our given interest rate from percent to decimal form.

Now let us substitute our given values in above formula.

To find the amount of total interest we will subtract principal amount from 171875.

Therefore, the total interest after 5 years will be $46875.