Question

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

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

Answer 1

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

Step-by-step explanation:

The student is asking about the interest owed after the first month on a $3,000 loan with an annual interest rate of 12% using a simple interest calculation. To find the monthly interest, you need to divide the annual interest rate by 12 (the number of months in a year) and then apply it to the loan amount:

• Monthly interest rate = Annual interest rate / 12
• Monthly interest rate = 12% / 12
• Monthly interest rate = 1%

Interest for one month = Principal × Monthly interest rate

• Interest for one month = $3,000 × 1%
• Interest for one month = $3,000 × 0.01
• Interest for one month = $30

Therefore, the interest owed on $3,000 at the end of the first month is $30.