Question

Sam has a loan for $1200 at a rate of 9% annually. If the interest is not compounded, how much interest will he pay in 5 years?

A) $54.40
B) $108.00
C) $540.00
D) $1740.00

Answer 1

dont have a calculator with me but the formula is p=e^rt
so it would be 1200^(.09)(5) just enter that in the calculator and you should get the answer

Answer 2

The equation is provided below:

$1,200 * 9% = $108 (interest per year)
$108 * 5 years = $540 (interest to be paid in 5 years if not compounded)

So, the correct answer is C) $540. This will be the interest to be paid in 5 years for Sam's loan of $1,200.