To find the total amount to be paid back, we need to calculate the interest and add it to the principal amount borrowed.
The interest is calculated using the formula: Interest = Principal * Rate * Time
First, let's convert 2 ½ years into a decimal. 2 ½ years is equal to 2 + 0.5 years, which is equal to 2 + 0.5/1 = 2.5 years.
Now we can plug the values into the formula:
Interest = $8,500.00 * 0.075 * 2.5
Interest = $1,593.75
Now we can calculate the total amount to be paid back by adding the interest to the principal amount:
Total amount = Principal + Interest
Total amount = $8,500.00 + $1,593.75
Total amount = $10,093.75
Therefore, the total amount she will have to pay back at the end of the loan is $10,093.75.
The correct answer is B. $10,093.75.
Jessica borrowed $8,500.00 from the credit union to purchase a used car. The credit union gave her a rate of 7.5% annually for a period of 2 ½ years. What is the total amount she will have to pay back at the end of the loan?
Choose the best answer from the options below:
A $9,093.75
B $10,093.75
C $11,093.75
D $12,093.75
1 answer
1 answer