omar takes out a loan for his college tuition from a bank that charges simple interest at an annual rate of…

omar takes out a loan for his college tuition from a bank that charges simple interest at an annual rate of 14%. his loan is for $6800 for 4 months. assume each month is $\frac{1}{12}$ of a year. answer each part below. do not round any intermediate computations, and round your final answers to the nearest cent. if necessary, refer to the list of financial formulas. (a) find the interest that will be owed after 4 months. (b) assuming omar doesnt make any payments, find the amount owed after 4 months.

omar takes out a loan for his college tuition from a bank that charges simple interest at an annual rate of 14%. his loan is for $6800 for 4 months. assume each month is $\frac{1}{12}$ of a year. answer each part below. do not round any intermediate computations, and round your final answers to the nearest cent. if necessary, refer to the list of financial formulas. (a) find the interest that will be owed after 4 months. (b) assuming omar doesnt make any payments, find the amount owed after 4 months.

Answer

Explanation:

Step1: Identify the simple - interest formula

The formula for simple interest 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.

Step2: Convert the given values

The principal $P=$6800$, the annual interest rate $r = 14%=0.14$, and the time $t=\frac{4}{12}=\frac{1}{3}$ years.

Step3: Calculate the interest

Substitute the values into the formula: $I=Prt = 6800\times0.14\times\frac{1}{3}$. $I=\frac{6800\times0.14}{3}=\frac{952}{3}\approx317.33$.

Step4: Calculate the total amount owed

The total amount $A$ owed is the sum of the principal $P$ and the interest $I$. So $A = P+I$. $A=6800 + 317.33=7117.33$.

Answer:

(a) $$317.33$ (b) $$7117.33$