An investor bought an antique table for $6000. He paid 5% as a deposit and borrowed the remainder from a bank for two years at 18% p. a. simple interest, payable monthly. How much interest does he have to pay each month?

Question

Mathematics

Riya Butler

23 November, 12:13

An investor bought an antique table for $6000. He paid 5% as a deposit and borrowed the remainder from a bank for two years at 18% p. a. simple interest, payable monthly. How much interest does he have to pay each month?

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Answers (1)

Know the Answer?

Jack Mckay · Answer 1

First lets get rid of the deposit.

(0.95*6000) = 5700

Formula is I=PRT

I = Interest earned

P=Principal amount (5700)

R=Rate (18% or 0.18 or 18/100)

T=Time period (2 years)

Equation:

I = 5700*2*0.18

I = 2052

But remember the question asks for monthly payments!

2052/24 (12 months in a year and T = 2 years)

Answer=$85.50