Arnold borrowed $7890 at 11.5 percent for five years. How much did Arnold pay in interest?

Answer:

Arnold's total interest paid amounts to $2521.30

Explanation step-by-step:

Given that Arnold borrowed $7890 at an annual interest rate of 11.5% for a duration of five years,

we need to calculate the interest amount.

Using the formula for monthly payment,

Principal (P) = $7890

Annual interest rate = 11.5%

Thus, the monthly interest rate is

Time period = 5 years,

which translates to 5 × 12 = 60 months.

Plugging these values into the formula,

Upon simplification,

Monthly payment equals $173.52

Total amount paid over the term = number of months × monthly payment

= 60 × 173.52

= $10,411.30

Since Arnold borrowed $7890 initially,

interest paid = total amount paid - principal

= 10,411.30 - 7,890

= $2521.30

Therefore, Arnold's total interest paid is $2521.30