question 2 a borrower takes a loan of $4,500 at 8% simple interest for 5 years. how much total interest will…

question 2 a borrower takes a loan of $4,500 at 8% simple interest for 5 years. how much total interest will be paid? $1,700 $1,900 $1,600 $1,800 question 3 you deposit $3,500 at 7% annual interest, compounded annually for 4 years. what will the balance be?

question 2 a borrower takes a loan of $4,500 at 8% simple interest for 5 years. how much total interest will be paid? $1,700 $1,900 $1,600 $1,800 question 3 you deposit $3,500 at 7% annual interest, compounded annually for 4 years. what will the balance be?

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=$4500$, $r = 0.08$, and $t = 5$.

Step2: Calculate the simple interest

Substitute the values into the formula: $I=4500\times0.08\times5$. First, $4500\times0.08 = 360$, then $360\times5=1800$.

Step3: Recall compound - interest formula

The compound - interest formula is $A=P(1 + r)^t$, where $A$ is the amount of money accumulated after $n$ years, including interest, $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the number of years the money is invested for. Given $P = 3500$, $r=0.07$, and $t = 4$.

Step4: Calculate the compound - interest amount

$A = 3500\times(1 + 0.07)^4$. First, $(1 + 0.07)^4=1.07^4=1.07\times1.07\times1.07\times1.07\approx1.3108$. Then $A=3500\times1.3108 = 4587.8$.

Answer:

Question 2: $$1800$ Question 3: $$4587.8$