Final answer:
The company will pay $425 in interest for the $17,000 loan over a 180-day period at a 5% interest rate, using the simple interest formula: Interest = Principal × rate × time.
Step-by-step explanation:
To calculate the interest the company will pay on the $17,000 loan over a 180-day period with an interest rate of 5%, we must use the simple interest formula, which is:
Interest = Principal × rate × time
The principal in this case is $17,000, the interest rate is 5% (or 0.05 when converted to a decimal for calculation purposes), and the time is 180 days out of a standard 360-day year (as is common in financial interest calculations).
So, our formula for this example reads:
Interest = $17,000 × 0.05 × (180 / 360)
Interest = $17,000 × 0.05 × 0.5
Interest = $425
Therefore, the company will pay $425 in simple interest over the 180-day period.