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Nolan Walker decided to buy a used snowmobile since his credit union was offering such low interest rates. He borrowed $2,700 at 3.5% on December 26, 2019, and paid it off February 21, 2021. How much did he pay in interest? (Assume ordinary interest and no leapyear.) (Use Days in a year table.) (Do not round intermediate calculations. Round your answer to the nearest cent.)

Interest Paid?

Sagot :

Using the formula for simple interest, it is found that he paid $119.87 in interest.

The simple interest formula is given by:

[tex]E = PIt[/tex]

  • E is the amount of interest earned.
  • P is the principal(the amount of money invested).
  • I is the interest rate(yearly, as a decimal).
  • t is the time, in years.

In this problem:

  • Borrowed $2,700, thus [tex]P = 2700[/tex]
  • Interest rate of 3.5%, thus [tex]I = 0.035[/tex]
  • From December 26, 2019 to February 21, 2021, there were 423 days, thus the time in years is [tex]t = \frac{423}{365} = 1.2685[/tex]

Thus, the interest paid was of:

[tex]E = PIt = 2700(0.035)(1.2685) = 119.87[/tex]

$119.87.

A similar problem is given at https://brainly.com/question/9593067