Question

Benson Automotive borrows $2,000,000 at 9.25% from a bank to buy land to build a building for a new dealership. Given that the loan is for 9 months, find the interest

Answer 1

We are provided with the following;

`\begin{gathered} \text{Principal,p=\$2,000,000} \\ \text{Rate,}r=9.25\text{\%} \\ \text{Time,t}=9\text{months}=\text{ (}(9)/(12))\text{years} \\ \text{Time}=0.75\text{years} \\ \text{Interest}=\text{?} \end{gathered}`

The simple interest formula is given as:

`\begin{gathered} I=\frac{\text{prt}}{100} \\ I=(2,000,000*9.25*0.75)/(100) \\ I=(13,875,000)/(100) \\ I=\text{ \$138,750} \end{gathered}`

Hence, the interest is $138,750