latoya wants to buy a new boat but needs money for the down payment. her parents agree to lend her money at…

latoya wants to buy a new boat but needs money for the down payment. her parents agree to lend her money at an annual rate of 6%, charged as simple interest. they lend her $2000 for 2 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 latoya have to pay? $240 (b) what will the total repayment amount be (including interest)? $

latoya wants to buy a new boat but needs money for the down payment. her parents agree to lend her money at an annual rate of 6%, charged as simple interest. they lend her $2000 for 2 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 latoya 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=$2000$, $r = 0.06$ (since $6%=0.06$), and $t = 2$ years. $I=Prt=2000\times0.06\times2$

Step2: Calculate the interest

$2000\times0.06\times2 = 240$ (This is already given in part (a)).

Step3: Calculate total repayment amount

The total repayment amount $A$ is the sum of the principal $P$ and the interest $I$. So $A=P + I$. We know $P = 2000$ and $I = 240$. $A=2000 + 240$

Answer:

$2240$