SOLUTION: A loan amount is 35,000 at 7% interest. Over 8 years what will be the cost of the loan be?

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Question 2409: A loan amount is 35,000 at 7% interest. Over 8 years what will be the cost of the loan be?
Answer by gsmani_iyer(201) About Me  (Show Source):
You can put this solution on YOUR website!

Your problem does not say whether the interest is to be calculated on "Simple Interest System" or "Compound Interest System". Let us solve this problem on simple interest system. Under S.I., the formula is as below:

I = P%2An%2Ar%2F100 ; P=Principal amount; n=term(no.of years);
r=rate of interest; I=Interest amount.
When 3 values have been given, we can easily find out the other.
Here, Interest = %2835000%2A8%2A7%29%2F100 = 19,600
The total amount = P + I = 35,000 + 19,600 = 54,600. Answer


gsmani iyer