Nyla borrowed $3,425 from the bank at a simple interest rate of 13.5%. How much interest will the loan accure after two years?

Answer 1

When solving this problem, you must first convert the interest percentage to a decimal for multiplication. By moving the decimal point two times to the left, 13.5% becomes 0.135 which we then multiply by the amount borrowed or $3,425. This gives us 462.375, but this is only for one year. By taking this number and multiplying it by 2 for the number of years of interest, we get 924.75. Therefore, after 2 years this loan for $3,425 will accrue $924.75 in interest.

Answer 2

You will use the formula SI=PRT

SI= simple interest P=principal aka money you have R= rate as a decimal T= time in years

SI=3425 x 0.135 x 2

Simple interest earned = $924.75