SOLUTION: You borrow $1200 to buy a piano. The simple interest rate is 12%. You pay off the loan after 4 years. How much do you pay for the loan?

Algebra ->  Customizable Word Problem Solvers  -> Finance -> SOLUTION: You borrow $1200 to buy a piano. The simple interest rate is 12%. You pay off the loan after 4 years. How much do you pay for the loan?       Log On

Ad: Over 600 Algebra Word Problems at edhelper.com


    

Question 1111561: You borrow $1200 to buy a piano. The simple interest rate is 12%. You pay off the loan after 4 years. How much do you pay for the loan?
Answer by josmiceli(19441) About Me  (Show Source):
You can put this solution on YOUR website!
The $1,200 loan include principle and interest
+I+=+P%2Ar%2At+
+I+=+P%2A.12%2A4+
and
+I+%2B+P+=+1200+
+P+=+1200+-+I+
and
+I+=+%28+1200+-+I+%29%2A.12%2A4+
+I+=+576+-+.48I+
+1.48I+=+576+
+I+=+389.19+
He paid $389.19 for the loan
-------------------------------
check:
+389.19+=+P%2A.48+
+P+=+810.81+
and
+P+=+1200+-+I+
+P+=+1200+-+389.19+
+P+=+810.81+
OK