Question

Thang decided to borrow ​$6000 from his local bank to help pay for a car. His loan was for 3 years at a simple interest rate of ​9
%. How much interest will Thang​ pay?

Answer 1

Answer:

Thang will pay $1620 interest

Step-by-step explanation:

Simple Interest

Definition: Interest calculated on the original principal only of a loan or on the balance of an account.

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

r = interest rate

t = time

Thang borrowed P=$6000 from his local bank. The loan was for t=3 years at a simple interest rate of r=9% = 0.09. The interest is calculated as:

I = 6000*0.09*3

I = 1620

Thang will pay $1620 interest