Question

Tony borrowed $7,000 from his friend Joe at a rate of 5% interest rate for 4 months. What is the total that needs to be repaid after this time to the nearest dollar?

Answer 1

Given :

The amount of money Tony borrowed = $7,000

interest rate = 5% = 0.05

Time = 4 months = 4/12 years = (1/3) year

So, the interest =

$7000\cdot0.05\cdot\frac{1}{3}=116.67_-$

So, the total money need to repaid = 7000 + 116.67 = 7116.67

Rounding to the nearest dollar

So, the answer is : $7117