Samantha is taking out a loan for $17,452 at 6% simple interest for one year. How much interest will she pay?
1 answer:
Answer:
<em>She will pay $1,047.12 interest for one year</em>
Step-by-step explanation:
<u>Simple Interest</u>
Occurs when interest is calculated on the original principal only.
Unlike compound interest where the interest earned in the compounding periods is added to the new principal, simple interest only considers the principal to calculate the interest.
The interest earned is calculated as follows:
I=P.r.t
Where:
I = Interest
P = initial principal balance or loan
r = interest rate
t = time
Samantha takes out a loan for $17,452 at r=6%=0.06 simple interest for t=1 year. Calculating the interest:
I = $1,047.12
She will pay $1,047.12 interest for one year
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