Question

Clarissa needs a $2,500 loan in order to buy a car. How much interest would she owe if she took out a 24 - month loan with a 4.25% annual simple interest rate. Hint : 24 months needs to be converted to years

Answer 1

$212.50

Explanation:

Interest = P * r * t

P= principal

r = rate

t = time

r = 0.0425

t = 2 years = 24 months

P = 2500

Interest = 2500 * 0.0425 * 2 = $212.50