Question

Kyle has a loan of $32,890

This loan has a simple interest rate of 8% per year
What is the amount of interest that Kyle will be
charged on the loan at the end of one year?

Answer 1

$2,631.20

Explanation:

We are told that the loan has a simple interest rate of 8% per year. This means that every year that goes on without Kyle paying back the money, he will have to pay an extra 8% of $32,890 as interest.

After one year, he only has to pay back one lot of interest, just 8% of $32,890.

To find that number we can change 8% into a decimal: 8%/100% = 0.08

And then multiply this by the amount of loan money:

0.08 x 32,890 = 2,631.20

Kyle has to pay $2,631.20 of interest at the end of one year.

Hope this helped!