$1500 at 11% simple interest to be paid back in 8 months. Two months into the loan he makes a $450 payment.

Question

Mahershalalhashbaz (yes, this is a real name) borrows $1500 at 11% simple interest to
be paid back in 8 months. Two months into the loan he makes a $450 payment. How
much money does he save by making this payment early (as opposed to paying the
whole loan off after 8 months)?

Answer 1

The guy with the epic name saves 6 months of interest on the $450 that he paid back early:

 

I = P r t

I = $450 * 0.11 interest/yr * (6/12 yr)

 = $24.75