Question

You obtain a loan of $3,000 based on simple interest with an annual interest rate of 12 percent. At the end of the first month, the interest owed on $3,000 is

A) $30.
B) $36.
C) $300.
D) $360.

Answer 1

At the end of the first month, the interest owed on a $3,000 loan with an annual interest rate of 12 percent is $30, which is option A).

Step-by-step explanation:

The student has obtained a loan of $3,000 based on simple interest with an annual interest rate of 12 percent.

To find the interest owed at the end of the first month, we must first calculate the monthly interest rate, which is the annual rate divided by 12. The monthly interest rate is 12 percent / 12 = 1 percent.

The interest for one month is then calculated by multiplying the principal amount by the monthly interest rate:

$3,000 × 0.01 = $30.

Therefore, at the end of the first month, the interest owed on a $3,000 loan at a 12 percent annual interest rate is $30.

This corresponds to option A).