Question

Background Info: Tom needs money to pay for education expenses, and he finds a personal loan. The loan would require him to repay the principal in one lump sum after three years. Loan Option A Principal: $9,000 Type of Interest: Simple Interest Interest Rate: 11% Rate of Accrual: Once per year Use the formula for simple interest. A=(P)(r)(t) Remember, A refers to the interest accrued. Calculate the total interest Tom would pay, in addition to paying back his $9,000 in principal. $970 $1,970 $2,970 $3,970

Answer 1

Answer: The total interest Tom would pay in addition to paying back his $9000 in principal is (c) $2,970.

The simple interest formula gives us the interest that is due on the principal over a given period of time at a given rate of interest.

The Simple Interest Formula is:

$\mathbf{A = (P)(r)(t)}$

where

A = interest accrued on the principal

P = is the principal i.e. amount that is loaned or borrowed

r = interest rate

t = number of years interest is calculated.

Substituting the values in the formula we get,

$A = (9000)(0.11)(3)$

$\mathbf{A = 2,970}$

Answer 2

The total interest Tom would pay on the personal loan is $\boxed{\ 2970}.$Option (c) is correct.

Further explanation:

The compound interest rate formula can be expressed as follows,

$\boxed{A = P{{\left( {1 + r} \right)}^t}}$

The simple interest rate formula can be expressed as,

$\boxed{A = P \times r \times t}$

Here, ${\text{A}$ represents the amount, ${\text{P}$ represents the principal amount, $r$ represents the interest rate and t represents the time.

Given:

The simple interest rate is $11\%$ and the time period is 3 years.

The principal amount is $\ 9000.$

Explanation:

The total interest Tom would pay on the personal loan can be calculated as follows,

$\begin{aligned}A&= P \times r \times t\\&= 9000 \times 0.11 \times 3\\&= 27000 \times 0.11\\&= \ 2970\\\end{aligned}$

The total interest Tom would pay on the personal loan is $\boxed{\ 2970}$. Option (c) is correct.

Option (a) is not correct.

Option (b) is not correct.

Option (c) is correct.

Option (d) is not correct.

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Answer details:

Grade: High School

Subject: Mathematics

Chapter: Simple interest

Keywords:Tom, education, expenses, personal loan, loan, repay, one lump sum, 3 years, simple interest rate, Principal, invested, interest rate, account, effective interest rate, total interest, 11% rate of interest, paying back, nearest hundredth percent, amount.