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Annie would like to take out a loan to put a new playground in her yard for her kids. She offers her car which is worth $7,800 as collateral. The loan officer at the bank is permitted to loan Annie 92% of the value of her collateral. How much will Annie be able to borrow for the playground using her car as collateral?

a.


$7,708.00

b.


$7,176.00

c.


$7,800.00

d.


$8,478.26

Verified Answer :

Edufirst

Answer:

Annie will be able to borrow $ 7,716.00 for the playground using her car a collateral (option b).


Explanation:


Interpretation of the problem: to take out a loan to put a new playground in her yard for her kids, Annie offers her car which is worth $ 7,800 as collateral. Since the loan officer at the bank is permitted to loan Annie 92% of the value of her collateral, in order to know how much Annie will be able to borrow, you must use percentage calculations.


Percent is a definition: percent is the ratio of an amount with respect to one hundreed. The mathematical expressions derived from that definition is:

  • Percent, % = (amount / base) × 100

In this case, the percent that the officer is permitted to loan is known, 92%, the amount to borrow is unknown (x), and the base is the value of her car (the collateral), $ 7,800, which leads to the following equation:

  • 92 = (x / 7,800)×100

Now, you can solve for x:

  • x = 7,800 × 92/100 = 7,800 × 0.92 = 7,176.00

In conclusion, Annie will be able to borrow $ 7,716.00 for the playground using her car as collateral.

Answer:

7,176.00

Step-by-step explanation:

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