A college student takes out a `\$7500` loan from a bank

I think that the question you are trying to ask is . . . A college student takes out a $7500 loan from a bank. What will the balance of the loan be after one year(assuming the student has not made any payments yet)

a. if bank charges 3.8% interest each year ?

b. if the bank charger 5.3% interest each year ?

(a) $7785

(b) $7897.5

Step-by-step explanation:

Given:

Loan = $7500

We need to find the balance of the loan be after one year(assuming the student has not made any payments yet).

The formula for amount or loan is

A = P( 1 + r)^t         (1)

where, P is principle, r is rate of interest and t is time in years.

(a) If bank charges 3.8% interest each year.

r = 3.8% = 0.038

Substitute P=7500, r=0.038 and t=1 in equation (1).

A = 7500 (1 + 0.038)^1

A = 7500 (1.038)

A = 7785

Therefore, the balance of the loan be after one year is $7785.

(b) If the bank charger 5.3% interest each year.

r = 5.3% = 0.053

Substitute P=7500, r=0.053 and t=1 in equation (1).

A = 7500 (1 + 0.053)^1

A = 7500 (1.053)

A = 7897.5

Therefore, the balance of the loan be after one year is $7897.5.