Question

Andrew has a four-year college loan for $20,000. The lender charges a simple interest rate of 5 percent. How much interest will he have to pay? simple interest = P × r × t

a. $800
b. $4,000
c. $10,000

Answer 1

Answer: The Answer is B. $4,000 i took test and got it right

Explanation:

Answer 2

Given that loan amount P=20000

Interest rate r=5% = 0.05

Time of loan t=4 years

Now to find the interest amount we just plug those values into formula

simple interest = P × r × t

simple interest = 20000* 0.05* 4

simple interest = 1000 * 4

simple interest = 4000

Hence final answer is choice b. $4000.