Answer:
The case 4- 5 year loan with a 3% simple interest yields MOST interest.
Step-by-step explanation:
Here, P = 10,000
Now, we need to calculate the Simple Interest in difference cases.
SIMPLE INTEREST =
<u>CASE : 1 </u> Time = 2 year, Rate = 4.75%
⇒SIMPLE INTEREST =
= 950
So, SI on $10,000 for 2 years on Rate 4.75% is $950.
<u>CASE : 2 </u> Time = 2 .5 year, Rate = 4%
⇒SIMPLE INTEREST =
= $1000
So, SI on $10,000 for 2.5 years on Rate 4% is $1000.
<u>CASE : 3 </u> Time = 3 year, Rate = 4.25%
⇒SIMPLE INTEREST =
= 1275
So, SI on $10,000 for 3 years on Rate 4.25% is $1275.
<u>CASE : 4 </u> Time = 5 year, Rate =3%
⇒SIMPLE INTEREST =
= 1500
So, SI on $10,000 for 5 years on Rate 3% is $1500.
Hence, the case 4 yields the MOST amount of interest.
simple interest rate 5 year loan with a 3% simple interest rate is option 4