An online lending company is offering simple interest personal loans based on consumer credit scores. With your credit score, you can borrow $4900 for 7 years at an interest rate of 14.62%. How much money will you pay the lending company at the end of 7 years? Round your answer to the nearest cent, if necessary.

To determine how much you will pay the lending company at the end of 7 years, we use the simple interest formula:

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

Where:
- $I$ is the interest
- $P$ is the principal amount (initial loan)
- $r$ is the annual interest rate (as a decimal)
- $t$ is the time in years

### Step 1: Calculate the Interest
Given:
- $P = 4900$ (loan amount)
- $r = 14.62\%$ = 0.1462 (decimal form)
- $t = 7$ years

Now, calculate the interest:

\[
I = 4900 \times 0.1462 \times 7
\]

\[
I = 5007.74
\]

### Step 2: Calculate the Total Amount Paid
The total amount paid is the sum of the principal and the interest:

\[
\text{Total Amount} = P + I = 4900 + 5007.74 = 9907.74
\]

Therefore, at the end of 7 years, you will pay the lending company **$9,907.74**.

Would you like further details on how simple interest works?

Here are some related questions for you:
1. How would the amount change if the interest rate were lower?
2. What would happen if the loan duration was increased to 10 years?
3. Can you calculate the interest for a loan of $10,000 at the same rate for 5 years?
4. How does compound interest differ from simple interest in such loans?
5. How does changing the principal amount affect the total interest?

**Tip:** Always make sure to convert the percentage interest rate into a decimal form when performing interest calculations.

Learn how to calculate the total amount paid on a $4900 loan with a 14.62% simple interest rate over 7 years. This problem involves key concepts such as simple interest formula and percentage calculations, suitable for students in Grades 9-11.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation