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.

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Summary of Results

1. Interest: $69,371.71
2. Maturity Value: $84,071.71

Would you like more detailed explanations or have any questions?

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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.