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

Explanation:

Step1: Identify variables

Principal \( P = \$9000 \), interest rate \( r = 11\% = 0.11 \), time \( t = 3 \) years.

Step2: Apply simple interest formula

The formula for simple interest is \( A = P \times r \times t \). Substitute the values: \( A = 9000 \times 0.11 \times 3 \).

Step3: Calculate the product

First, calculate \( 9000 \times 0.11 = 990 \). Then, \( 990 \times 3 = 2970 \).

Answer:

\$2,970 (corresponding to the option: \$2,970)