Question

Joe borrowed $9,000 from the bank at a rate of 7% simple interest pa year. How much interest did he pay in 5 years? In 5 years, Joe pays ? In Interest

Answer 1

Principal = 9000

Interest rate = 7% = 0.07

Time = 5 years

Simple interest formula:

A = P(1 + rt)

In this case:

A = 9000(1 + 0.07*5) = 9000(1 + 0.35) = 9000(1.35) = 12150

Interest = A - P = 12150 - 9000 = 3