Question

The business manager of paws and claws pet supply arranges a loan of $3,500, at 6.5% interest, for 30 months. find the amount of interest.

Answer 1

You will need to use the total loan cost formula which can be found here:
http://www.1728.org/loanfrm4.htm

Total Loan Cost = [(rate * princ)/ (1-(1+r)^-n)] * n
where "n" is the number of payments which in this case is 30
the rate is entered as (6.5 / 1,200) or 0.0054166667

Total Loan Cost = [( 0.0054166667 * 3,500) / (1-(1.0054166667)^-30)] * 30

Total Loan Cost =  [ (18.95833345) /  (1- 0.8503889213 )] * 30

Total Loan Cost =  [18.95833345 / 0.1496110787] * 30

Total Loan Cost =  126.717443753  * 30

Total Loan Cost =  3,801.52

By calculating 3,801.52 minus 3,500.00 we get the amount of interest

301.52