Question

Holly is taking out a loan in the

amount of $10,000, Her choices for
the loan are a 4-year loan at 4%
simple interest and a 6-year loan at
5% simple interest, What is the
difference in the amount of interest
Holly would have to pay for each of
these two loans?
$1,600
$3,000
$4,600
$1,400
D)
(8,12A)​

Answer 1

The answer is $1,400

Here is the work:

10,000 X 4/100 X 4 years =$1,600 Interest Holly has to pay on 4%, 4-year loan.
10,000 X 5/100 X 6 years =$3,000 Interest Holly has to pay on 5%, 6-year loan.
$3,000 - $1,600 =$1,400 Difference in interest between the two loan choices.