Question

What is the total interest on a 4-year term loan of

$1,700 with a simple annual interest rate of 8%?

A. $544
B. $554
C. $564
D. $574

Answer 1

a

Explanation:

The formula to calculate simple interest is:

I = P * r * t

Where:

I = Interest

P = Principal amount

r = Rate of interest

t = Time period

Given:

Principal amount (P) = $1,700

Rate of interest (r) = 8% per annum

Time period (t) = 4 years

Using the formula of simple interest:

I = P * r * t

I = 1,700 * 0.08 * 4

I = $544

Therefore, the total interest on a 4-year term loan of $1,700 with a simple annual interest rate of 8% is $544.

Answer: A. $544