Answer:
A. Interest = $1710
B. Monthly payment = $467.08
Step-by-step explanation:
Simple interest formula:
[tex]\sf A = P(1+rt)[/tex]
where:
- A = final amount
- P = principal
- r = annual interest rate (in decimal form)
- t = time (in years)
Given:
- P = $9,500
- r = 9% = 0.09
- t = 2 years
Substitute given information into the formula:
[tex]\begin{aligned} \sf \implies A & = \sf 9500(1+0.09 \cdot 2)\\& = \sf 11210 \end{aligned}[/tex]
Interest = final amount - principal
= 11210 - 9500
= $1710
term = 2 years
1 year = 12 months
⇒ term = 2 × 12 = 24 months
Monthly payment = final amount ÷ months in term
= 11210 ÷ 24
= $467.08
