Question

Benson has a bankruptcy on his credit report, so he pays higher interest rates on his current loans. he calculates that the extra money he pays in additional interest each year, if invested at the rate of 2% for one year, could earn him simple interest totaling $180. how much does benson pay in additional interest each month? a. $360 b. $750 c. $900 d. $1,000 please select the best answer from the choices provided. a b c d

Answer 1

The additional interest Benson pay each month is $750 if he invested at the rate of 2% for one year, option (b) is correct.

What is simple interest?

It is defined as the interest on the based on the principal amount, it does not include the compounded amount. The interest calculate on the initial amount or borrowed amount.

We know the formula for the simple interest is given by:

I = PRT

Where I is the simple interest.

P is the principal amount

R is the rate of interest

We have in the question:

I = $180

R = 2% = 0.02

T = 1  year

Put the above values in the formula, we get:

180 = P(0.02)(1)

P = $9000

The additional interest Benson pay each month is:

= 9000/12

= $750

Thus, the additional interest Benson pay each month is $750 if he invested at the rate of 2% for one year option (b) is correct.

Learn more about the simple interest here:

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