Question

Benson has a bankruptcy on his credit report, so he pays higher interest rates on his current loans. He calculates that the extra money he pays in additional interest each year, if invested at the rate of 2% for one year, could earn him simple interest totaling $180. How much does Benson pay in additional interest each month?

Answer 1

Given:
Interest = 180
term = 1 year
Interest rate = 2%

We need to get the principal amount using the simple interest formula.

Interest = Principal * interest rate * term
180 = P * 2% * 1
180 / 2% = P
9,000 = Principal

Benson pays an additional interest of  9,000 each year. A monthly payment of 750.

9,000 / 12 months = 750 per month.

Answer 2

Based on the amount that Benson could earn if he invested the additional interest for one year, the additional interest per month is $750.

What additional interest is Benson paying?

This can be found by the formula:

= (Simple interest amount earned / Number of months in year) / Simple interest rate

Solving gives:

= (180 / 12) / 0.02

= 15 / 0.02

= $750

Find out more on additional interest at https://brainly.com/question/27037531.

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