Question

john took a loan in the amount of 2,500$ out with his local bank. he has 3 years to pay it off with an interest rate of 7.75%. how much interest will John end up paying if he pays it off at the end of the 3 year loan?

Answer 1

Therefore, John will end up paying $583.75 in interest if he pays off the loan at the end of the 3-year term.

Explanation:

To calculate the amount of interest John will end up paying on the loan, we can use the formula:

Interest = Principal * Rate * Time

Step 1: Convert the interest rate from a percentage to a decimal:

7.75% = 0.0775

Step 2: Plug in the values into the formula:

Principal = $2,500

Rate = 0.0775

Time = 3 years

Interest = $2,500 * 0.0775 * 3

Interest = $583.75

Therefore, John will end up paying $583.75 in interest if he pays off the loan at the end of the 3-year term.