The amount of interest that Margo would pay on the amount borrowed is $31.50.
Interest is the cost of borrower. It is the amount that the borrower must pay the lender for use of its funds. The interest paid is a function of the amount borrowed, the interest rate and the duration of the loan.
Interest = amount borrowed x (annual interest rate / number of months in a year) x number of months
Interest = $300 x (0.07/12) x 18
Interest = $300 x 0.00583 x 18 = $31.50
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