Question

You borrow $3,897 for a loan for college expenses with a 2.5% interest rate. How much interest is charged on the loan

Answer 1

Amount of interest pay per year = $97.5 (Approx.)

Explanation:

Given:

Amount borrow for college expenses = $3,897

Rate of interest = 2.5%

Find:

Amount of interest pay per year

Computation:

Using Simple interest formula;

Simple interest = Amount borrow x Rate of interest x number of year

Amount of interest pay per year = 3,897 x 2.5% x 1

Amount of interest pay per year = 3,897 x 0.025

Amount of interest pay per year = 97.425

Amount of interest pay per year = $97.5 (Approx.)