simple interest question

Mathematics
Tutor: None Selected Time limit: 1 Day

find the simple interest and total amount due on a $1850 loan at 9 1/2% for 2 1/2 years

Oct 30th, 2015

Thank you for the opportunity to help you with your question!

We have

Total amount=$1850

Yearly interest =9.5%

Time=2.5 year

Formula for monthly payment:-




So monthly payment=$69.52

So the total payment=69.52*12*2.5=$2085.6

Interest=$2085.6-$1850=$235.6(answer)

Please let me know if you need any clarification. I'm always happy to answer your questions.
Oct 30th, 2015

the formula is very complicated..can it be made simpler. what does P, M, T stand for

Oct 30th, 2015

PMT stands for payment in an ordinary annuity.It is used to calculate the monthly payment for a loan amount with the interest rate given.So here we have to calculate the monthly payment and multiply the total monthly payment with the number of period of payment to get the total amount we will be paying and then subtract witht the initial amount to get the interest.

I hope it helps but if you have any further doubt then you can surely ask

---Thanks--------


Oct 30th, 2015

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