Question

Lauren agrees to pay back $3,400 in one year at an interest rate of 15%. The bank subtracts the 15% discount from the $3,400, and gives the rest to Lauren. Find the amount of the discount and the proceeds to Lauren.

Discount = $

Proceeds = $

Answer 1

Answer:

hence proceeds is $2513.05 and discount is $443.47

Step-by-step explanation:

Lauren pays = $3,400

interest = 15%

time = 1 yr

$P(1+\dfrac{r}{100} )^n = 3400\\P(1+\dfrac{15}{100} )^1 = 3400\\P=2956.52$

the amount to be discounted is

$\dfrac{15}{100} \times 2956.52 = 443.47$

discount = $443.47

proceeds = $2956.52 -$443.47

proceeds = $2513.05

hence proceeds is $2513.05 and discount is $443.47