Question

You take out a simple interest loan with a principal of $1500. Your interest rate is

5.6% and your loan term is 4 years.
What is the total interest you will pay?
What is the total you will pay including your principal and interest?

Answer 1

Answer: See explanation

Explanation:

Interest = Principal × Rate × Time

Interest = $1500 × 5.6% × 4

= $1500 × 0.056 × 4

= $336

The total amount that will be paid will be:

= Principal + Interest

= $1500 + $336

= $1836