Question

A bank loans a customer $95,000 for a period of 20 years. The simple interest rate of the loan is 6.5%. What is the amount of simple interest?

A.
$140,000

B.
$123,500

C.
$135,000

D.
$100,000

Answer 1

The answer is b
B
B
B
B
B
B
B
B
B
B
B
B
B
B

Answer 2

b

Explanation:

First, converting R percent to r a decimal

r = R/100 = 6.5%/100 = 0.065 per year,

then, solving our equation

I = 95000 × 0.065 × 20 = 123500

I = $ 123,500.00

The simple interest accumulated

on a principal of $ 95,000.00

at a rate of 6.5% per year

for 20 years is $ 123,500.00.