trying to find out how to work with APR

Question

Marta borrowed $1,380 for 15 months at 13 percent APR. How much will she pay in interest?
$258
$224.25
$295.54
$261.16


18. What will be Marta's monthly payment?
$101.17
$96.76
$117.56
$106.95

Answer 1

Assuming simple interest (not compounded):

 

Interest = Principle*Rate*Time

• Principle = Loan amount = $1380
• Rate = APR expressed as a decimal = 13% = 0.13
• Time = years = 15/12 = 1.25

 

Interest = ($1380)*(0.13)*(1.25) = ______

 

The monthly payment is:

 

Monthly Payment = (Principle+Interest)/(Number of Months) = ($1380+Interest)/15 = _______