A bank in houston loans $40,000 a business at 11.5% annual simple interest for 24 months.

Question

How much interest will the bank earn?

Answer 1

Interest = Principle*Rate*Time

 

Where:

• Principle = $40,000
• Rate = 11.5% = 0.115 (must use the decimal form)
• Time = 2 years

 

Plug the numbers into the formula to get the answer.