Question

A college student takes out a $7,500 loan from a bank. What will the balance of the loan be after one year (assuming the student has not made any payments yet) if the bank charges 3.8% interest each year?

Answer 1

Answer:

Substitute P=7500, r=0.038 and t=1 in equation (1). ... Substitute P=7500, r=0.053 and t=1 in equation (1). Therefore, the balance of the loan be after one year is $7897.5.

Step-by-step explanation:

Answer 2

Answer:7785

Step-by-step explanation:

If the bank charges 3.8% interest each year, and we are calculating the balance of the loan after one year, that means the balance of the loan will be $7500 plus 3.8% of $7500.

To calculate 3.8% of $7500, we can multiply 3.8% * 7500.

3.8% as a decimal is 0.038.

0.038 * 7500 = 285

The bank will add $285 onto the price of the loan each year. After 1 year the balance of the loan is $7500 + $285 = $7785.

The answer is 7785