Question

The table shows interest owed for a home improvement loan based on how long it takes to pay off the loan.

Answer 1

Remember that  the formula for simple interest is:
$I=prt$
Where I is the interest to paid, p is the loan, r is the interest rate (in decimal), and t is the time (in years).

A. We know that the interest rate for a loan of 9 months is 2.9%, but we need to convert that rate to decimal. To do that just divide the interest rate by 100%:
$\frac{2.9}{100} =0.029$
Next, we are going to find the time t in years. Since the period of time is 9 months, we are going to dive by 12, the number of months in a year, to obtain the time in years:
$t= \frac{9}{12} =0.75$
Now, we just need to replace the values in our formula to find the interest owned:
$I=(900)(0.029)(0.75)=19.58$
We can conclude that the interest owed for a home improvement loan of $900 after 9 months is $19.58.

B. Similarly:
$r= \frac{3.1}{100} =0.031$
$t= \frac{18}{12} =1.5$
$I=(2500)(0.031)(1.5)=116.25$
We can conclude that the interest owed for a home improvement loan of $2500 after 18 months is $116.25.

C. Similarly:
$r= \frac{2.4}{100} =0.024$
$t= \frac{6}{12} =0.5$
$I=(5600)(0.024)(0.5)=67.2$
We can conclude that the interest owed for a home improvement loan of $5600 after 6 months is $67.2