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1 vote
Suppose you borrowed $10,000 via a pure discount loan at 6.25 percent

interest per year and were going to pay back both principal and interest in
five years. How much interest would you pay?

1 Answer

3 votes

Answer:

Total amount of interest = $3,125

Step-by-step explanation:

Given:

Amount borrowed = $10,000

Interest per year = 6.25% = 0.0625

Number of year = 5 year

Find:

Total amount of interest

Computation:

Total amount of interest = Amount borrowed x Interest per year x Number of year

Total amount of interest = 10,000 x 0.0625 x 5

Total amount of interest = $3,125

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