diane wants to buy a new house but needs mone...
diane wants to buy a new house but needs money for the down payment. her parents agree to lend her money at an annual rate of 2%, charged as simple interest. they lend her $3000 for 4 years. she makes no payments except the one at the end of that time. answer the following questions. if necessary, refer to the list of financial formulas. (a) how much total interest will diane have to pay? $240 (b) what will the total repayment amount be (including interest)?
Answer
# Explanation:
## Step1: Recall simple - interest formula
The simple - interest formula is $I = Prt$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. Given $P=\$3000$, $r = 0.02$ (since $2\%=0.02$), and $t = 4$ years. We already know from part (a) that the interest $I = 240$.
## Step2: Calculate total repayment amount
The total repayment amount $A$ is the sum of the principal $P$ and the interest $I$. So $A=P + I$. Substitute $P = 3000$ and $I = 240$ into the formula.
$A=3000 + 240$
# Answer:
$3240$