To calculate how much Ed had to pay back under an add-on plan, you first need to determine the interest amount and then add it to the principal amount.
Interest = Principal x Rate x Time
Interest = $1,500 x 0.135 x (4/12)
Interest = $1,500 x 0.135 x 0.3333
Interest = $1,500 x 0.045
Interest = $67.50
Total amount to pay back = Principal + Interest
Total amount to pay back = $1,500 + $67.50
Total amount to pay back = $1,567.50
Therefore, Ed had to pay back $1,567.50 under the add-on plan.
Ed borrowed $1,500 for four months at 13.5%. How much did he have to
pay back under an add-on plan?
1 answer