Question

Remmy establishes a loan for an $8000 vacation package to Transylvania. The vacation company charges 5.5% simple interest rate. Remy plans to pay back the loan over 1.5 years.How much interest will Remmy pay?

Answer 1

Remmy will pay $660 interest.

Step - by - Step Explanation

What to find? The amount of interest to be paid.

Given Parameters:

• Principal (P) = $8000

,

• Rate of interest(R) = 5.5

,

• Time(t in years) = 1.5

The formula for calculating simple interest is given below:

`S.I=(P* R* T)/(100)`

Where P is the principal.

R represents the rate.

T is the time given in years.

S.I is the simple interest.

Substitute the values into the formula and simplify.

`S.I=(8000*5.5*1.5)/(100)`

`S.I=\frac{80\cancel{00}*5.5*1.5}{1\cancel{00}}`

`=80*5.5*1.5`

= 660

Hen