The difference between the amounts of interest Katy and Frank paid for their loans is $180 Step-by-step explanation: The formula of the simple interest is I = Prt, where P is the amount of the loan r is the interest rate in decimal t is the time Katy took out a 5-year loan for $18,000 and paid 7.00% annual simple interest ∵ The amount of her loan is $18,000 ∴ P = 18,000 ∵ The annual simple interest is 7% ∴ r = 7% = 7 ÷ 100 = 0.07 ∵ The loan is for 5 years ∴ t = 5 - Substitute these values in the formula above ∴ I = 18,000(0.07)(5) ∴ I = 6,300 ∴ Katy will pay $6,300 interest for her loan Frank took out a 6-year loan for $18,000 and paid 6.00% annual simple interest ∵ The amount of his loan is $18,000 ∴ P = 18,000 ∵ The annual simple interest is 6% ∴ r = 6% = 6 ÷ 100 = 0.06 ∵ The loan is for 6 years ∴ t = 6 - Substitute these values in the formula above ∴ I = 18,000(0.06)(6) ∴ I = 6,480 ∴ Frank will pay $6,480 interest for his loan ∵ The difference between their interests = 6,480 - 6,300 ∴ The difference between their interests = $180 The difference between the amounts of interest Katy and Frank paid for their loans is $180
