Question

Find the simple interest due (in dollars) on a 4 year loan of $1250 if the annual simple interest rate is 4.5%

Answer 1

$225

Explanation:

To find the simple interest due, we use the formula:

`\text{Simple Interest}=(Principal* Rate* Time)/(100)`

In the given problem:

• The Principal = $1,250

,

• Annual simple interest rate = 4.5%

,

• Time = 4 years

Substitute into the formula:

`\begin{gathered} SI=(1250*4.5*4)/(100) \\ =12.50*(9)/(2)*4 \\ =12.50*9*2 \\ =\$225 \end{gathered}`

The simple interest due is $225.