Simple Interest

Reply 1

Respond to at least one classmate’s initial post by answering the following:

· Think about then show the formula with numbers for what happens to the interest, the total amount of a loan, and monthly payments of your classmate’s loan if the time was reduced by one and a half years at the start of the loan. You may use a calculator to perform the computations.

· Explain why your classmate will pay a different amount (more or less) for the loan in the end. Were you surprised by the results? Why or why not?

· If this was your loan and dream object, discuss one change you could make in your life to make the new monthly payment possible. What would you expect to happen if the time was increased at the start of your classmate’s loan? Why?

Jun 1 at 15:23pm Julian Richmond

Manage Discussion Entry

Connor McGregor’s $3.6 million Tecnomar Lamborghini 63 speed boat.

https://www.forbes.com/sites/nathanieleasington/2021/07/23/conor-mcgregor-flaunts-his-new-36-million-lamborghini-yacht-the-supercar-of-the-sea/?sh=34252afa2790 (Links to an external site.)

Simple Interest:

I = PRT

Principal = $3,600,000

Interest Rate = 9.5%

Years = 11 (132 equal payments)

Question 1: How much interest am I paying?

I=3,600,000⋅0.095⋅11

I=3,762,000

Question 2: What is my monthly payment?

3,600,000+3,762,000132

Monthly Payment= $55,772.73

Reply 2 Taylor Pace

Respond to a different classmate’s initial post by answering the following:

· What do you think will happen if the interest rate provided in your classmate’s post was decreased by one percentage point at the start of the loan? Explain why.

· Confirm your answer. Show the formula with numbers and compute the new interest your classmate will pay with this new interest rate. You may use a calculator to perform the computations.

· Compare the interest of the two loans. Share with your classmate how much interest will be saved over the loan length.

Review the Discussion Rubric for detailed grading information.

Please proceed to the Why? section.