Tamara J. answered • 02/14/13

Math Tutoring - Algebra and Calculus (all levels)

You are given the following:

Principal = money borrowed = $20,900

Time = period of time to repay = 18 months = 1.5 years

Rate = rate of interest charged = 10.4%

The amount that she must pay the bank in 1.5 years (18 months) is given by the following formula:

Amount = Principal + Simple Interest

Therefore, we first have to calculate the simple interest, which is given by the following formula:

Interest = Principal • Time • (Rate/100)

= 20,900 • 1.5 • (10.4/100)

= 20,900 • 1.5 • 0.104

= 3,260.4

Amount = Principal + Interest

= 20,900 + 3,260.4

= 24,160.4

Thus, the amount paid back to the bank in 1.5 years is $24,160.40 (A) and $3,260.40 of this amount is interest (B).