Question

Jim borrows $14,000 for a period of 4 years at 6 % simple interest. Determine the interest due on the loan. [4 marks

Answer 1

Answer: $ 3,360

Explanation:

Given : The principal amount borrowed for loan :
`P=\ \$14,000`

Time period :
`t=4`

Rate of interest :
`r=6\%=0.06`

The formula to calculate the simple interest is given by :-

`S.I.=P* r* t\\\\\Rightatrrow\ S.I.=14000*4*0.06\\\\\Rightatrrow\ S.I.=3360`

Hence, the interest due on the loan = $ 3,360