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18 November, 11:08

Sammy plans on a discounted loan with an advertised interest rate of 9%. Sammy will pay $153 in interest on the $1700 loan. How much will Sammy receive at the start of this loan?

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  1. 18 November, 12:42
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    Sammy will receive US$ 1.547 at the start of this loan

    Step-by-step explanation:

    1. Let's review the data given to us for solving the question:

    Advertised interest rate = 9%

    Amount of interests Sammy will pay = US$ 153

    Amount of the loan Sammy plans to take = US$ 1,700

    2. How much will Sammy receive at the start of this loan?

    Net amount Sammy will receive at the start of this loan = Amount of the loan Sammy plans to take - Amount of interests Sammy will pay

    Net amount Sammy will receive at the start of this loan = 1,700 - 153

    Net amount Sammy will receive at the start of this loan = 1,547

    Sammy will receive US$ 1.547 at the start of this loan

    Amount of interests Sammy will pay = Loan * Advertised interest rate

    Amount of interests Sammy will pay = 1,700 * 9%

    Amount of interests Sammy will pay = US$ 153
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