Question

the bank agrees to give you a loan of $80,000 to start you bussines, but they will charge you %8.5 interest on the loan. how much will you have to pay the bank in interest in year one, if you do not pay back any of the loan until year 2

Answer 1

To calculate the first year's interest on an $80,000 loan at 8.5%, use the simple interest formula I = P × r × t. With P = $80,000, r = 8.5% (or 0.085), and t = 1 year, the interest I = $6,800. Therefore, you will owe $6,800 in interest for the first year.

Step-by-step explanation:

To calculate how much you will have to pay in interest in the first year for a loan of $80,000 at an interest rate of 8.5%, without paying back any of the loan until year 2, you can use the formula for simple interest:

I = P × r × t

where:

• I is the interest
• P is the principal amount ($80,000)
• r is the annual interest rate (8.5%, or 0.085 as a decimal)
• t is the time in years (1 year)

Plugging these values into the formula gives:

I = $80,000 × 0.085 × 1

I = $6,800

Thus, you will have to pay $6,800 in interest in year one.