00:01
In this problem, we're told that jennifer borrowed $20 ,900 from the bank to open a for a shop.
00:05
She's going to repay all the money in 18 months, and she has a simple interest rate of 10 .4%.
00:12
So in part a, we're being asked, how much in total is she going to have to pay the bank back after 18 months? well, the first thing we're going to have to do is figure out, well, how much interest is she going to accrue? so because they told us it was simple interest, we're going to use the formula i equals prt.
00:29
I is the amount of interest, p is the amount you borrow, r is the rate as a decimal, or your percent is a decimal, and t is the time in years.
00:39
Well, because she borrowed $20 ,900, that will be our p value.
00:45
Her rate is at 10 .4%.
00:47
Well, 10 .4 % as a decimal is 0 .104.
00:50
Remember, you move the decimal two places to the left.
00:54
And she's going to borrow this for 18 months.
00:57
But remember, time has to be in terms of years.
01:00
So 18 months would be one year and an additional six months out of a total 12, which is really one in one half or as a decimal 1 .5...