A restaurant borrows $16100 from a local bank for 8 months. The local bank charges simple interest at an annual rate of 2.45% for this loan. Assume each month is 1/12 of a year. Answer each part below.

Do not round any intermediate computations, and round your final answers to the nearest cent. If necessary, refer to the list of financial formulas.

(a)	Find the interest that will be owed after 8 months.
 
(b)	Assuming the restaurant doesn't make any payments, find the amount owed after 8 months.

To solve this problem, we need to use the formula for simple interest:

\[
I = P \times r \times t
\]

Where:
- $ I $ is the interest,
- $ P $ is the principal amount (the initial amount of money),
- $ r $ is the annual interest rate (expressed as a decimal),
- $ t $ is the time the money is borrowed for (in years).

### (a) Find the interest that will be owed after 8 months.

1. **Principal ($ P $)**: $16,100
2. **Annual interest rate ($ r $)**: 2.45% = 0.0245 (as a decimal)
3. **Time ($ t $)**: 8 months = $\frac{8}{12} = \frac{2}{3}$ years

Now, we plug in the values into the simple interest formula:

\[
I = 16100 \times 0.0245 \times \frac{2}{3}
\]

\[
I = 16100 \times 0.0245 \times 0.6667
\]

\[
I = 16100 \times 0.01633515
\]

\[
I = 262.00
\]

So, the interest that will be owed after 8 months is **$262.00**.

### (b) Find the amount owed after 8 months.

The total amount owed after 8 months includes the principal plus the interest.

\[
\text{Total Amount} = P + I
\]

\[
\text{Total Amount} = 16100 + 262.00 = 16362.00
\]

So, the amount owed after 8 months is **$16,362.00**.

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Would you like further details or have any questions?

Here are 5 related questions:
1. How would the interest change if the loan period was 12 months instead of 8 months?
2. What would be the interest if the annual rate was increased to 3.5%?
3. How does simple interest differ from compound interest?
4. If the restaurant made a partial payment during the 8 months, how would that affect the interest calculation?
5. What would happen to the total amount owed if the interest rate was compounded monthly instead of calculated as simple interest?

**Tip:** Always convert the time into years when using financial formulas, as most rates are annual.

A restaurant borrows $16100 from a local bank for 8 months. The local bank charges simple interest at an annual rate of 2.45% for this loan. Assume each month is 1/12 of a year. Answer each part below.

(a) Find the interest that will be owed after 8 months.

(b) Assuming the restaurant doesn't make any payments, find the amount owed after 8 months.

Learn how to calculate the simple interest on a $16,100 loan borrowed for 8 months at an annual rate of 2.45%. This problem includes a step-by-step solution, covering key concepts such as the simple interest formula and time conversion. Ideal for students in Grades 9-11.

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