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4 votes
Ramona needs $2,095 immediately to pay for damage she did to her

friend's car. She obtains a one-year loan with a 12% simple yearly interest
rate. How much did she pay in interest only for the loan?

User Bikash
by
7.8k points

1 Answer

3 votes

Answer:

She paid $251.40 in interest only for the loan.

Explanation:

This is a simple interest problem.

The simple interest formula is given by:


E = P*I*t

In which E is the amount of interest, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.

In this problem:


P = 2095, t = 1, I = 0.12

So


E = 2095*0.12*1 = 251.4

She paid $251.40 in interest only for the loan.

User Dan Croak
by
7.8k points

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