LizD
Answered

An investor bought an antique table for $6000. He paid 5% as a deposit and borrowed the remainder from a bank for two years at 18% p.a. simple interest, payable monthly. How much interest does he have to pay each month?

Verified Answer :


First lets get rid of the deposit.
(0.956000)=5700

Formula is I=PRT
I= Interest earned
P=Principal amount (5700)
R=Rate (18% or 0.18 or 18/100)
T=Time period (2 years)
Equation:
I= 57002*0.18
I= 2052
But remember the question asks for monthly payments!
2052/24            (12 months in a year and  T= 2 years)
Answer=$85.50

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