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A company offering short term loans agrees to lend Nick $1,200. The amount (plus interest) is...

A company offering short term loans agrees to lend Nick $1,200. The amount (plus interest) is repayable in one year, and the interest rate is 12% per month. What is the total amount that must be repaid? Give your answer in dollars to the nearest dollar. Do not include commas or the dollar sign in your answer. For example if your answer is $1,234.56 enter 1235

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Answer #1

Amount lent = $1,200
Monthly interest rate = 12%
Period = 12 months

Interest accrued = Amount lent * Monthly interest rate * Period
Interest accrued = $1,200 * 12% * 12
Interest accrued = $1,200 * 1.44
Interest accrued = $1,728

Amount repaid = Amount lent + Interest accrued
Amount repaid = $1,200 + $1,728
Amount repaid = $2,928

So, Nick should repay $2,928 in 1 year.

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