Question

Rita has a loan of $45,580. This loan has a simple interest rate of 4% per year. What is the amount of interest that Rita will be charged on this loan at the end of one year?

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Answer 1

$1,823.20

Explanation:

You are going to want to use the simple interest formula for this. The one below is modified for solving the interest earned.

`I = Prt`

I = interest amount

P = principal amount

r = interest rate (decimal form)

t = time

First, change 4% into its decimal form:

4% ->
`(4)/(100)` -> 0.04

Next, plug in the values:

`I=45,580(0.04)(1)`

`I=1823.20`

Rita will be charged $1,823.20 worth of interest at the end of one year.