Question

Sarah borrowed $18,000 for 4 years at an annual simple interest rate of 7%. How much interest will she pay at the end of the 4 years?

Answer 1

Answer:

$5,040

Step-by-step explanation:

You are going to want to use the simple interest formula for this. The one below is modified for solving the interest earned.

$I=Prt$

I = interest amount

P = principal amount

r = interest rate (decimal form)

t = time

First, change 7% into its decimal form:

7% -> $\frac{7}{100}$ -> 0.07

Next, plug in the values into the equation:

$I=18,000(0.07)(4)$

$I=5,040$

Sarah will have to pay $5,040 at the end of the 4 years.