Question

Joyce took out a small loan for $1200. The interest on the loan was 10.5%, but she paid it back in just 18 months. How much did she pay back in interest?

Answer 1

We will use the formula of simple interest

`I=P\cdot r\cdot t`

Where I is the interest, P is the principal, r is the rate and t is the time.

In our case

P=1200

r=10.5%

t=18 meses = 1.5 years

We substitute the data

`I=1200\cdot0.105\cdot1.5=189`

ANSWER

She will pay back in interest $189