Question

21. Brian took out a 48-month (4 years) loan for $1,800 at

an annual interest rate of 12%. Andy took out a
2-year loan for $4,200 at an annual interest rate of
10%. Who paid more in interest and how much more
did he pay?

A. Andy paid $34 more in interest.
B. Brian paid $34 more in interest.
C. Andy paid $24 more in interest.
D .Brian paid $24 more in interest.

Answer 1

Answer: the answer is C. Brian paid $24 more in interest than Andy.

Step-by-step explanation: To find out how much interest each person paid, we can use the formula:

Interest = Principal x Rate x Time

where Principal is the amount borrowed, Rate is the annual interest rate (as a decimal), and Time is the length of the loan (in years).

For Brian's loan:

Principal = $1,800

Rate = 0.12

Time = 4 years

Interest = $1,800 x 0.12 x 4 = $864

For Andy's loan:

Principal = $4,200

Rate = 0.10

Time = 2 years

Interest = $4,200 x 0.10 x 2 = $840

So Andy paid $840 in interest, while Brian paid $864 in interest. To find out how much more Brian paid than Andy, we can subtract:

$864 - $840 = $24

Answer 2

To find the total interest paid by Brian, we can use the simple interest formula:

I = P * r * t

where I is the interest, P is the principal (the amount borrowed), r is the annual interest rate as a decimal, and t is the time period in years.

For Brian's loan, we have:

I = 1800 * 0.12 * 4 = $864

So Brian paid a total of $864 in interest over the 4-year term.

For Andy's loan, we can use the same formula:

I = 4200 * 0.10 * 2 = $840

So Andy paid a total of $840 in interest over the 2-year term.

To find the difference in interest paid, we subtract the smaller amount from the larger amount:

864 - 840 = $24

Therefore, Brian paid $24 more in interest than Andy. The answer is option D.