Question

You obtain a simple interest loan from National City for $2,500 at 7.5% for 5 years. Find the amount of interest on the loan

Answer 1

$937.50

Explanation:

interest (I) is calculated as

I = PRT

where P is the principal ( amount borrowed ), R is the rate of interest and T is the time in years

here P = $2500, R = 7.5 and T = 5

I = $2500 ×
`(7.5)/(100)` × 5 = 25 × 7.5 × 5 = $937.50