Question

Austin's brother loaned him $20 and asked him to pay him back in 3 months. He's going to charge 4% interest. Austin is excited about all extra money he will make in interest. Is is correct to be excited?

Answer 1

Explanation:

Yes, it is correct for Austin to be excited about the extra money he will make in interest. Interest is a common form of compensation for loaning money to another person, and it is generally expected to be paid back along with the principal amount. In this case, Austin will earn 4% interest on the $20 loan over the course of 3 months, which works out to be a total of $0.80. This is a relatively small amount, but it is still money that Austin would not have had if not for the loan. Therefore, it is reasonable for Austin to be excited about the opportunity to make a little extra money.