Question

A man borrowed $3700 from a bank for 6 months. A friend was co-signer of the mans personal note. The bank collected 8.5% simple interest on the date of maturity. A) how much did the man pay for the use of the money B) determine the amount he repaid to the bank on the due date of the note

Answer 1

(A) $157.25

(B) $3,857.25

Explanation:

The given values are:

Principle (P)

= $3700

Time (T)

= 6 months i.e., 1/2 years

Rate (R)

= 8.5%

(A)

As we know,

Simple Interest,

⇒
`SI=(P* R* T)/(100)`

On putting the values, we get

⇒
`=(3700* 8.5* (1)/(2) )/(100)`

⇒
`=(15,725)/(100)`

⇒
`=157.25` ($) (he paid for the use of money)

(B)

Amount he paid to the bank will be:

⇒
`P+SI`

⇒
`3700+157.25`

⇒
`3,857.25` ($)