SOLUTION: Jane took out a 5,000 loan to buy a car. How much simple interest will she pay if she charged 10% annually and repays the loan at the end of 2 years?
Algebra ->
Customizable Word Problem Solvers
-> Finance
-> SOLUTION: Jane took out a 5,000 loan to buy a car. How much simple interest will she pay if she charged 10% annually and repays the loan at the end of 2 years?
Log On
Question 547824: Jane took out a 5,000 loan to buy a car. How much simple interest will she pay if she charged 10% annually and repays the loan at the end of 2 years? Answer by mathie123(224) (Show Source):
You can put this solution on YOUR website! We know that the simple interest formula is I=Prt where I is the interest, P is the principal amount, r is the interest rate and t is the number of time periods
In our case, the principal is 5000, the interest rate is 10%=0.1, and there are 2 years (and since the interest is ANNUALLY, this is two time periods). We just need to sub this into the above formula and solve for I
So she ended up paying $1000 in interest.
(