Question

Ella is Bono motorcycle and he’s taking out a loan in the amount of $15,000 her choice is for the loan or a 36 month loan at 6.50% annual simple interest and 48 month loan at 7.50 annual simple interest what is the difference in the amount of interest Ella would have to pay for these two loans

Answer 1

Explanation:

Explanation:

The formula for simple interest is expressed as

I = PRT/100

Where

P represents the principal

R represents interest rate

T represents time in years

I = interest after t years

Considering the 36-month loan,

T = 36 months = 36/12 = 3 years

P = $15000

R = 6.5%

Therefore

I = (15000 × 6.5 × 3)/100

I = 292500/100

I = $2925

Considering the 48-month loan loan,

T = 48 months = 48/12 = 4 years

P = $15000

R = 7.5%

Therefore

I = (15000 × 7.5 × 4)/100

I = 450000/100

I = $4500

The difference in the amount of interest Ella would have to pay for these two loans is

4500 - 2925 = $1575