Question

Emma is taking out a loan in the amount of $25,000. Her choices for the loan are a 60-month loan at 5% annual simple interest and a 72-month loan at 6% annual simple interest. What is the difference in the amount of interest Emma would have to pay for these two loans?

A) $1,750
B) $2,000
C) $2,250
D) $2,750
HELP NOW PLEASE

Answer 1

The answer is $2750. Which is the difference in the amount of interest Emma would have to pay for these two loans

Explanation:

Interest=( P× r × t)/100

60 months is converted to 5years(60/12=5)

Interest= (25000 × 5 × 5) /100

= $6250

72months is converted to 6 years(72/12=6 Years)

Interest=( P× r × t)/100

= (25000 × 6 × 6)/100

=$ 9000

The difference in the interest= $9000- $6250

= $ 2750