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anonymous

  • one year ago

In order to start a small business a student takes out a simple interest loan for $7000 for 9 months with 12% interest. How much interest must the student pay (round to the nearest cent) and find the future value of the loan (round to the nearest cent)

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  1. anonymous
    • one year ago
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    @texaschic101

  2. DanJS
    • one year ago
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    REmember the definition for the simple interest Simple Interest = Current Value x rate x time in years I = P*r*t just have to calculate the interest I

  3. DanJS
    • one year ago
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    r = 0.12 P = 7000 t = 9/12

  4. texaschic101
    • one year ago
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    but what about the future value ? Thats where I get lost

  5. DanJS
    • one year ago
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    yeh , i guess they want that in terms of time maybe,

  6. texaschic101
    • one year ago
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    does this have anything to do with it...or am I way off... http://www.algebra.com/algebra/homework/Finance/PMTFV.lesson

  7. anonymous
    • one year ago
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    I'm not sure

  8. DanJS
    • one year ago
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    Future Value = Start Value + Accumulated interest

  9. texaschic101
    • one year ago
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    so basically do the I = PRT to find I, and when that is found, add it back to P ??

  10. DanJS
    • one year ago
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    value of the loan at 9months is the future i assume, not t

  11. DanJS
    • one year ago
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    FV = P + P*r*t FV = P(1+r*t)

  12. texaschic101
    • one year ago
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    oh....ok...I see now. FV = 7000 + 7000 * 0.12 * 9/12(or 3/4)

  13. texaschic101
    • one year ago
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    you get it smiley ?

  14. anonymous
    • one year ago
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    kinda

  15. texaschic101
    • one year ago
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    FV = 7000 + 7000 * 0.12 * 3/4 FV = 7000 + 840 * 3/4 FV = 7000 + 630 FV = 7630 According to the formula that Dan gave us....I got this

  16. anonymous
    • one year ago
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    oh alright what was the amount of interest

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