Question

Bob took out a 5 year loan for $4000 and paid 3% annual simple interest

Bill took out a 4 year loan for $4000 and paid 5% annual simple interest

What is the sum of amounts of interest bob and bill paid for their loans

Answer 1

Sum = $1400

Explanation:

Given the following data;

I. For Bob;

Principal, P = $4000

Interest rate, R = 3%

Time, T = 5years

To find the simple interest, we would use the following formula;

S.I = PRT/100

Substituting into the formula, we have;

S.I = 4000*3*5/100

S.I = 40 * 15

S.I = $600

II. For Bill;

Principal = $4000

Interest rate = 5%

Time = 4years

To find the simple interest;

S.I = PRT/100

S.I = 4000*5*4/100

S.I = 40 * 20

S.I = $800

III. Sum of amounts of interest for both;

Sum = 600 + 800

Sum = $1400

Therefore, the sum of amounts of interest bob and bill paid for their loans is $1400.