Question

6. Scott borrowed $250.00 from a relative for 9 months. He agrees to pay compound interest at the rate of 4% per month.

a. How much interest will he pay his relative when he returns the money at the end of the 9 months? Explain how you solve this problem.
b. Suppose he has to extend the loan and ends up paying a total of $506.45. For how many months did he borrow the money? Explain how you solve this problem

Answer 1

You go to connexus?

Answer 2

Yeah

Answer 3

Interest= Principle x Rate x Time(in years)
x=250 (.04)(.75)
x=7.5 He will pay $7.50

256.45=250 (.04)x
256.45=10x
25.64=x
Remember that the time is in years, so to find the time in months, we multiply the answer by 12 and get 307.7 months.

Answer 4

Thanks so much!