a restaurant borrows $12,100 from a local bank for 2 months. the local bank charges simple interest at an…

a restaurant borrows $12,100 from a local bank for 2 months. the local bank charges simple interest at an annual rate of 11% for this loan. 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 2 months. (b) assuming the restaurant doesnt make any payments, find the amount owed after 2 months.

a restaurant borrows $12,100 from a local bank for 2 months. the local bank charges simple interest at an annual rate of 11% for this loan. 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 2 months. (b) assuming the restaurant doesnt make any payments, find the amount owed after 2 months.

Answer

Explanation:

Step1: Identify the 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.

Step2: Convert the given values to the appropriate form

The principal amount $P=$12100$, the annual interest rate $r = 0.11$ (since $11%=0.11$), and the time $t=\frac{2}{12}=\frac{1}{6}$ years.

Step3: Calculate the interest

Substitute the values into the formula: $I = Prt=12100\times0.11\times\frac{1}{6}$. $I=\frac{12100\times0.11}{6}=\frac{1331}{6}\approx221.83$.

Step4: Calculate the total amount owed

The total amount owed $A$ is the sum of the principal and the interest, so $A=P + I$. $A = 12100+221.83=12321.83$.

Answer:

(a) $$221.83$ (b) $$12321.83$