Question

To find the amount of interest Jesse will pay to borrow money, you can use the formula I = PRT. How much interest will Jesse pay if he borrows $5,000 for 5 years with an interest rate of 8%?

A. $2,000.00

B. $20,000.00

C. $200.00

D. $2,500.00

Answer 1

The formula to calculate simple interest is I = PRT, where:

I = Interest
P = Principal amount (the amount borrowed)
R = Rate of interest (as a decimal)
T = Time (in years)

Given:
P = $5,000
R = 8% or 0.08 (converted to a decimal)
T = 5 years

Let's use the formula to find the interest:

\[ I = PRT \]
\[ I = 5000 \times 0.08 \times 5 \]
\[ I = 2000 \]

Therefore, Jesse will pay $2,000 in interest if he borrows $5,000 for 5 years at an interest rate of 8%.

The correct answer is A. $2,000.00.

Answer 2

Using the simple interest formula I = PRT, Jesse will pay $2,000.00 in interest after borrowing $5,000 for 5 years at an 8% interest rate, corresponding to option A.

Step-by-step explanation:

To find out how much interest Jesse will pay on a loan, we use the simple interest formula I = PRT, where I is the interest, P is the principal amount, R is the rate of interest per year (as a decimal), and T is the time in years.

Jesse borrowed $5,000 for 5 years at an interest rate of 8%. To convert the interest rate to decimal form, we divide 8 by 100, which gives us 0.08. Now we can calculate the interest Jesse will pay:

I = PRT
I = $5,000 × 0.08 × 5
I = $2,000.00

Therefore, the amount of interest Jesse will pay is $2,000.00, which corresponds to option A.