Client #1

Jax came to your bank to borrow $8,500 to start a new business. Your bank offers him a 30-month loan with an annual simple interest rate of 4.35%.

1. (3 pt) Calculate the simple interest for this loan. Write out 1) the correct formula with variables (e.g. P₀, P_N, N, r, etc.), and 2) the correct formula with the numerical values (round your answer to the nearest cent, 3) write the answer in a complete sentence.

2. (2 pt) Determine the total amount that Jax will have to pay back at the end of 30-months. Write out 1) all the steps, and 2) write the answer in a complete sentence.