Question

Enrique takes out a student loan to pay for his college tuition this year. Find the interest on the loan if he borrowed $2,500 at an annual interest rate of 6% for 15 years. (Show all work!)

Answer 1

Suppose the interest model payment follows a simple interest model. The amount of interest to be paid will be given by:

I=(PRT)/100

P=principle=$2500

R=rate=6%

T=time=15 years.

Therefore:

S.I=(2500×6×15)/100

=$2250