Algebra and Trigonometry (6th Edition)
6th Edition
ISBN: 9780134463216
Author: Robert F. Blitzer
Publisher: PEARSON
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Lenders such as banks, credit unions, and mortgage companies make loans. The person receiving the loan usually pays the loan off in small payments over a long period of time. The lender earns money by charging interest, which is based on a percentage of the amount that is borrowed. There are different types of interest. Car loans are usually calculated using the formula for simple interest. The total amount repaid is based on the interest and the value of the original loan, called the principal. The formula for the total dollars needed to repay the loan, with interest, is found using the formula
where
- is the amount (total principal plus interest) required to repay the loan.
- is the amount borrowed, the principal.
- is the annual interest rate, quoted as a percent, but used as a decimal in the formula.
- is the time, in years, taken to repay the loan (six months would be year).
Suppose you get a loan of at an annual interest rate of .
(a) Use the given information to write the formula for the total amount to be repaid in years.
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