Ernie Bilko has a business idea. He wants to rent an abandoned gas station for just the months of November and December. He will convert the gas station into a drive-through Christmas wrapping

station. Customers will drive in, drop off their gifts, return the next day, and pick up their wrapped gifts. He needs $332,200 to rent the gas station, purchase wrapping paper, hire workers, and

advertise. If he borrows this amount at 61% Interest for those two months, what size lump sum payment will he have to make to pay off the loan? (Round your answer to the nearest cent.)

Respuesta :

Correction is the question: 6[tex]\frac{1}{2}%[/tex]% = 6.5%

Answer:

Amount to be repaid is $335798.833

Step-by-step explanation:

Amount of loan = $332,200

Rate of interest = 6.5%

time =  2months = 2/12 = 1/6 years

The amount of interest is simple interest

SI = [tex]\frac{P * R * T}{100}[/tex]

    =[tex]\frac{ 332200 * 6.5 *1 }{100 * 6}[/tex]

    = $3598.833

Final amount to be repaid = 332200+ 3598.833

                                            = $335798.833