How much simple interest would be paid on a loan of $1950 at 8.1% for 70 months?

[adell]

How much simple interest would be paid on a loan of [FONT=STIXMathJax_Main]$[FONT=STIXMathJax_Main]1950[/FONT][/FONT] at [FONT=STIXMathJax_Main]8.1[FONT=STIXMathJax_Main]%[/FONT][/FONT] for [FONT=STIXMathJax_Main]70[/FONT] months? Round your answer to the nearest cent. Note: [FONT=STIXMathJax_Main]360[/FONT] days in a year and [FONT=STIXMathJax_Main]30[/FONT] days in a month.


I have a lot of questions similar to this but I'm not sure how to do them. We went over a lot in class and I can't find my notes for this

 

[stapel]

How much simple interest would be paid on a loan of $1950 at 8.1% for 70 months? Round your answer to the nearest cent. Note: 360 days in a year and 30 days in a month.

I have a lot of questions similar to this but I'm not sure how to do them. We went over a lot in class and I can't find my notes for this

Fortunately, there are loads of lessons available online, such as in this list.

Please study at least three lessons from the listing. Then attempt the exercise. If you get stuck, you can then reply with a clear listing of your thoughts and efforts so far. Thank you!

 

[HallsofIvy]

For this particular problem, the "number of days in a year" and "number of days in a month" are not particularly relevant because this problem deals only with months and years, not days. What is important is that there are 12 months in a year so 70 months is 70/12= 5 years and 10/12= 5 and 5/6 years. Since this is simple interest, we don't have to consider compounding or payments or anything like that. 8.1% for 5 and 5/6 years is (0.081)(5)+ (0.081)(5/6)= 0.4725or 47.25% of the original $1950 so the interest would be (1950)(.4725)= 921.375 or $921.38.

 

[HallsofIvy]

Thanks, I realized that I had rounded incorrectly when I change to decimal. I have gone back and corrected that mistake so I can pretend I never made it!