Question

Deanna wants to borrow $8000. Two banks offer a 4-year loan term. One loan has a 5% interest rate, and the other has a 6% interest rate. How much more interest will Deanna pay if she accepts the loan at 6% for the 4-year term?

Answer 1

I=prt
I interest earned
P principle
R interest rate
T time

The difference between I2 and I1
I2-I1=8,000×0.06×4−8,000×0.05×4
=320
Bank 2 will pay 320 more than bank 1