Question

A business owner has two loans from the local bank. One of the loans is a three-year loan with a principal of $75,000 and an annual interest rate of 5%. The other is a one-year loan with a principal of $21,000 and an annual interest rate of 4.5%. What is the simple interest total for both loans for the first year

Answer 1

$8475

Explanation:

Therefore simple interest for the loan from the local bank is a three year loan with a capital of $75000 and an annual interest of 5%. for the year will be

=PTR/100

=
`(75000×5×1)/(100)`

Interest = $3750

Other loan is a one year loan with a principal of $21000 and annual interest of 4.5%

Hence interest of first year from this loan will be

=PTR/100

=
`(21000×4.5×1)/(100)`

=$4725

Total interest for 1 year =
`3750+4725=8475`