Question

A loan for $4,000 is given at a 6% interest rate for 2 years. Find the simple interest owed on the loan.

Answer 1

A = $4,480.00

I = A - P

Equation: A = P(1 + rt)

Calculation:
First, converting R percent to r a decimal
r = R/100 = 6%/100 = 0.06 per year.

Solving the equation:
A = 4000(1 + (0.06 x 2)) = 4480
A = $4,480.00

The total amount accrued, principal plus interest, from simple interest on a principal of $4,480.00 at a rate of 6% per year for 2 years is $4,480.00

Answer 2

I = $ 480.00

Explanation:

First, converting R percent to r a decimal

r = R/100 = 6%/100 = 0.06 per year,

then, solving our equation

I = 4000 × 0.06 × 2 = 480

I = $ 480.00

The simple interest accumulated

on a principal of $ 4,000.00

at a rate of 6% per year

for 2 years is $ 480.00.