SOLUTION: Anna has a bank loan on their condominium on 1.5 million SEK. She has a variable interest rate is currently 3.75%. What percentage increase her annual interest expense, if the bank

Question 1062224: Anna has a bank loan on their condominium on 1.5 million SEK. She has a variable interest rate is currently 3.75%. What percentage increase her annual interest expense, if the bank raises interest rates by half a percentage? Round off your answer to integers.
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
1,500,000*0.0375*1 year, assuming simple interest and one year=56,250
1,500,000*0.0425*1 year=63,750
That is an increase of 7,500.
Another way is 1,500,000*0.005, which is the increase alone=7500.
If the interest is compounded, the answer will be different.
The percentage increase is 7500/56,250=13.3% or 13% to the nearest integer.
That is the same as .5/3.75.
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