Answer:
$2,950
Step-by-step explanation:
We can use the simple interest formula for this:
[tex]A = P (1 + rt)[/tex]
P = initial balance
r = annual interest rate
t = time
First, change 12% into its decimal form:
12% -> [tex]\frac{12}{100}[/tex] -> 0.12
Next, we need to change the annual interest rate to 1.5 since 18 months is 1.5 years. Now plug in the values:
[tex]A=2,500(1+(0.12)(1.5))[/tex]
[tex]A=2,950[/tex]
The total amount owed after 18 months is $2,950
