A loan of $15 000 is taken out. If the interest rate on the loan is 7%, how much interest is due and what is the amount repaid if the loan is due in seven months

Correct Answer: 15612.50

Explanation:

We have P = 15 000, r = 0.07 and since the actual date the loan was taken out
is not given, we use t =7/12

I = Prt=$15 000* 0.07* 7/12 = $612.50

Amount repaid = Future or accumulated value,

S = P + I = $15 000 + $612.50 = $15 612.50

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