MATHEMATICS QUESTION

Question

Ron borrowed $20,000 to start up his consulting business. The loan had a simple interest rate 5.6% for 2 years. Use the formula I= prt to find the amount of interest he will pay on the loan. I= interest, p= principal, r= rate ( expressed as a decimal 0.056 ) t = time in years

Answer 1

Total simple interest paid = $2,240.00

I=prt = 20,000(.056)(2)

2 times 5.6%= 11.2%, which is a little over 10%

10% of 20,000 is 2,000

so expect interest to be a little over 2,000