Question

Steven borrows $60,000 for school. The interest rate is 6.5%. He wants to pay off the loan in 12 years. What would be the simple interest rate?
$4,680
$4,680,000
$44,000
$46,800

Answer 1

Answer:

• D) $46800

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The amount of simple interest is:

• Interest = Loan * rate * time

or

• I = P * r * t

Given:

• P = $60000, r = 6.5%, t = 12 years

Substitute and calculate:

• I = 60000*(6.5/100)*12 = 46800

The matching choice is D.

Answer 2

Answer:

$46,800

Step-by-step explanation:

Simple Interest Formula

I = Prt

where:

• I = interest
• P = principal
• r = interest rate (in decimal form)
• t = time (in years)

Given:

• P = $60,000
• r = 6.5% = 0.065
• t = 12 years

Substitute the given values into the formula and solve for I:

$\implies \sf I=60000(0.065)(12)$

$\implies \sf I=3900(12)$

$\implies \sf I=46800$

Therefore, the interest is $46,800.