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