A man received 7 per cent interest on a loan of $800 for one year. How much interest did he receive? A.) $56 B.) $560 C.) $780 D.) $870 D.) None of these

Question

Kaylie

Mathematics

21 August, 13:36

A man received 7 per cent interest on a loan of $800 for one year. How much interest did he receive? A.) $56 B.) $560 C.) $780 D.) $870 D.) None of these

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Answers (1)

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Lily Chavez · Answer 1

A.) $56

Step-by-step explanation:

1. Convert 7% into the numerical version by either

A. Moving the decimal two spaces to the right, giving us. 07

or

B. Making 7% into a fraction, 7/100

2. Now make an equation with the total amount of money (M) multiplied by the interest (P) inside of parenthesis. This will give us 7% of $800 in your case.

(800 *.07) → 56

3. Then, multiply by the number of years the interest has been accumulated.

56 * 1

The official equation for this is: a = p (1 + r) ^t

a = amount at end (initial amount + interest gained)

p = initial amount

r = rate (percent interest)

t = time in years