Using simple interest, it is found that
a) The monthly payment was of $321.53.
b) 36 monthly payments were made.
c) The sum of the monthly payments is of $11,575.
d) $1,575 was paid in interest.
The amount of simple interest accrued after t years is modeled by:
[tex]A(t) = P(1 + rt)[/tex]
In which:
- P is the principal, which is the initial deposit.
- r is the interest rate, as a decimal.
In this problem:
- Loan of $10,000, hence [tex]P = 10000[/tex].
- APR of 5.25%, hence [tex]r = 0.0525[/tex]
- 3 years, hence [tex]t = 3[/tex]
Item c:
The sum is A(3), hence:
[tex]A(t) = P(1 + rt)[/tex]
[tex]A(3) = 10000[1 + 0.0525(3)][/tex]
[tex]A(3) = 11575
[/tex]
The sum of the monthly payments is of $11,575.
Item d:
Interest is amount subtracted by principal, hence:
[tex]I = A(3) - P = 11575 - 10000 = 1575[/tex]
$1,575 was paid in interest.
Item b:
3 years, hence 3 x 12 = 36 monthly payments were made.
Item a:
[tex]\frac{11575}{3} = 321.53[/tex]
The monthly payment was of $321.53.
A similar problem is given at https://brainly.com/question/13176347
