ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Hannah borrowed $7000 for 5 years at a rate of 6.25%. Hannah had to repay a total of $9187.50. What was the interest she paid on the loan?
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$2187.50
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$7000
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6.25%
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$9187.50
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Explanation:
Detailed explanation-1: -5% = 0.05 . Then multiply the original amount by the interest rate. $1, 000 * 0.05 = $50 . That’s it.
Detailed explanation-2: -Here’s the simple interest formula: Interest = P x R x T. P = Principal amount (the beginning balance). R = Interest rate (usually per year, expressed as a decimal). T = Number of time periods (generally one-year time periods).
Detailed explanation-3: -The simple interest of a loan for $1, 000 with 5 percent interest after 3 years is $ 150.
Detailed explanation-4: -You can calculate your total interest by using this formula: Principal loan amount x interest rate x loan term = interest.
There is 1 question to complete.