Respuesta :
Answer:
$46875.
Step-by-step explanation:
We have been given that Dr. Drake buys a sailboat for 125000. He borrows the money at an APR of 7.5% for five years.
We will find total interest after 5 years by using simple interest formula.
[tex]A=P(1+rT)[/tex], where,
A= Amount after T years.
P= Principal amount.
r= The annual interest rate (in decimal form).
T= Time in years.
First of all we will convert our given interest rate from percent to decimal form.
[tex]7.5\text{ Percent}=\frac{7.5}{100} =0.075[/tex]
Now let us substitute our given values in above formula.
[tex]A=125,000(1+(0.075*5))[/tex]
[tex]A=125,000(1+0.375)[/tex]
[tex]A=125,000(1.375)[/tex]
[tex]A=171875[/tex]
To find the amount of total interest we will subtract principal amount from 171875.
[tex]\text{Total amount of interest}=171875-125000[/tex]
[tex]\text{Total amount of interest}=46875[/tex]
Therefore, the total interest after 5 years will be $46875.
