Pam Wedel borrowed $14,700 to pay for her child’s education at Riverside Community College. Leslie must repay the loan at the end of 11 months in one payment with  515%
  interest.

Required:
How much interest must Leslie pay?

Note: Do not round intermediate calculation. Round your answer to the nearest cent.

What is the maturity value?

Note: Do not round intermediate calculations. Round your answer to the nearest cent.



To solve this problem, we need to calculate both the interest and the maturity value of the loan.

Given:
- Principal (P) = $14,700
- Time (T) = 11 months
- Annual Interest Rate (R) = 515%

### Step 1: Calculate the Interest
Since the loan is for 11 months, we will convert this to a fraction of a year for interest calculations. Here, $ T = \frac{11}{12} $ years.

The formula for simple interest (I) is:
\[
I = P \times R \times T
\]

1. **Convert the interest rate from percentage to decimal**:  
   $ R = 515\% = 5.15 $

2. **Substitute values**:
   \[
   I = 14,700 \times 5.15 \times \frac{11}{12}
   \]

3. **Calculate**:
   \[
   I = 14,700 \times 5.15 \times 0.9167
   \]
   \[
   I \approx 69,371.71
   \]

So, **the interest Leslie must pay is approximately $69,371.71.**

### Step 2: Calculate the Maturity Value
The maturity value (M) is the total amount due at the end of the loan period, which includes both the principal and the interest.

\[
M = P + I
\]

1. **Substitute values**:
   \[
   M = 14,700 + 69,371.71
   \]
   \[
   M \approx 84,071.71
   \]

So, **the maturity value is approximately $84,071.71.**

---

### Summary of Results
1. **Interest**: $69,371.71
2. **Maturity Value**: $84,071.71

Would you like more detailed explanations or have any questions?

---

### Relative Questions

1. How would the calculations change if the loan term were 12 months instead of 11?
2. What would happen to the interest amount if the rate were compounded monthly rather than being simple interest?
3. How would a reduction in the interest rate to 300% impact the interest payment?
4. If Pam Wedel could make monthly payments, how would that change the maturity value?
5. How would a decrease in principal impact the maturity value?

### Tip:
When dealing with high-interest rates, it’s useful to check if the rate is simple or compounded as this can significantly affect total repayment.

Pam Wedel borrowed $14,700 to pay for her child’s education at Riverside Community College. Leslie must repay the loan at the end of 11 months in one payment with 515% interest.

How much interest must Leslie pay?

Note: Do not round intermediate calculation. Round your answer to the nearest cent.

What is the maturity value?

Note: Do not round intermediate calculations. Round your answer to the nearest cent.

Learn how to calculate the interest and maturity value for a $14,700 loan with a high interest rate of 515% over 11 months. This guide provides detailed steps, including the simple interest formula and maturity value calculation. Ideal for high school students in Grades 10-12.

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