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Sarah borrowed $18,000 for 4 years at an annual simple interest rate of 7%. How much interest will she pay at the end of the 4 years?

User Wibbler
by
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1 Answer

3 votes

Answer:

$5,040

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 7% into its decimal form:

7% ->
(7)/(100) -> 0.07

Next, plug in the values into the equation:


I=18,000(0.07)(4)


I=5,040

Sarah will have to pay $5,040 at the end of the 4 years.

User Sunil Mishra
by
9.0k points

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