Question

Juan loans $10,000.00 to a friend for 18 months at a simple interest rate of 7.5%. What amount of interest will Juan receive at the end of 18 months?

Answer 1

Juan will receive $1,125 in interest at the end of 18 months from a $10,000 loan at a 7.5% simple interest rate.

Step-by-step explanation:

To calculate the amount of interest Juan will receive from loaning $10,000 at a simple interest rate of 7.5% for 18 months, we can use the formula for simple interest:

Interest = Principal × Rate × Time

In this case, the principal (P) is $10,000, the rate (R) is 7.5% or 0.075 as a decimal, and the time (T) is 18 months. Since the time should be in years for this formula and there are 12 months in a year, we convert the time to years by dividing 18 months by 12. Therefore, T = 1.5 years.

Now, we substitute the values into the formula:

Interest = $10,000 × 0.075 × 1.5

Interest = $1,125

Hence, Juan will receive $1,125 in interest at the end of 18 months.

Answer 2

$1,125.00 is the amount of interest will Juan receive at the end of 18 months, for a loan of $10,000.00 to a friend for 18 months at a simple interest rate of 7.5%.

Step-by-step explanation:

To calculate the amount of interest Juan will receive at the end of 18 months, we can use the formula for simple interest:

Simple Interest (I) = Principal (P) x Rate (R) x Time (T)

Where:

P = Principal amount (the initial amount of the loan)
R = Annual interest rate (as a decimal)
T = Time the money is loaned out for (in years)

Given:
Principal (P) = $10,000.00 (this is the amount Juan loaned to his friend)

Annual interest rate (R) = 7.5% = 0.075 (when converted to a decimal by dividing by 100)

Time (T) = 18 months = 1.5 years (since there are 12 months in a year, we divide 18 months by 12 to convert it to years)

Now we can plug these values into our formula:
I = P x R x T
I = $10,000.00 x 0.075 x 1.5

Now it's just a matter of arithmetic:
I = $10,000.00 x 0.1125
I = $1,125.00

So, Juan will receive $1,125.00 in interest at the end of 18 months.