Question

The office manager of First Tech Support borrowed $25,000 to purchase new computers for employees. The bank charges 6 percent interest for 4 years. How much interest will the company pay in all? a. $1,200 b. $1,500 c. $4,800 d. $6,000

Answer 1

Answer:

d. $6,000

Step-by-step explanation:

We have been given that the office manager of First Tech Support borrowed $25,000 to purchase new computers for employees. The bank charges 6 percent interest for 4 years.

We will use simple interest formula to solve our given problem.

$I=Prt$, where,

I - Amount of interest,

P = Principal amount,

r = Interest rate in decimal form,

t = Time in years.

First of all, we will convert our given interest rate in decimal form.

$6\%=\frac{6}{100}=0.06$

Upon substituting our given values in simple interest formula, we will get

$I=\ 25,000*0.06*4$

$I=\ 6,000$

Therefore, the company will pay an amount of $6,000 in interest and option 'd' is the correct choice.

Answer 2

The answer is $6,000, because you multiply the 25,000 times .6 percent for interest, then multiply $15000 times .4 years and $6000 will be what you pay in interest.