Question

Nolan Walker decided to buy a used snowmobile since his credit union was offering such low interest rates. He borrowed $2,800 at 5.25% on December 26, 2019, and paid it off February 21, 2021. How much did he pay in interest? (Assume ordinary interest and no leap year.) (Use Days in a year table.) (Do not round intermediate calculations. Round your answer to the nearest cent.)

Answer 1

Using the formula for simple interest, it is found that Nolan Walker paid $170.35 in interest with the principal amount.

What is the simple interest?

Simple interest is computed on the loan principal or the first deposit into a savings account. Because simple interest does not compound, a creditor will only pay interest on the principal amount.

Formula:

S.I. = P×R×T

Where,

S.I. = Simple Interest

P = Principal Amount = $2,800

R = Interest Rate = 5.25%

T = Time Period = 423 days (From Dec. 26, 2019, to Feb. 21, 2021)

Then, the amount of S.I. by applying the given values in the formula would be:

S.I. = $2,800× 0.0525 ×423/365

S.I. = $170.35

Therefore, He will pay $170.35 as interest.

Learn more about the simple interest, refer to:

https://brainly.com/question/20595462

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