Question

James is seeking a loan with a simple interest rate of 3% per year. If he wants to borrow $8,000, then how much will he be charged in interest after 4 years?

Answer 1

960

Explanation:

I used a calculator but its 3% of $8,000 (which I'm pretty sure is 8,000 divided by 3) x 4 so in that's 240x4 which equals 960. Hope this helps have a good day!

Answer 2

$960

Explanation:

Simple interest is interest that goes up the same amount each period. The formula for simple is A=P(1+rt), where is A is the total amount, P is the principal (aka initial amount), r is the rate (in decimal form), and t is the time.

So, to solve we can use the equation, A=8000(1+0.03*4). In this equation A=8960, meaning that in 4 years the total amount owed, including the initial loan, will be $8960. Since the difference between the principal and the total amount is 960, $960 is the amount paid in interest.