Alice has a loan of 24,820. This loan has a simple interest rate of 3.5% per year. No payments will be made on the loan until the end of one year. How much interest will Alice pay on this loan at the end of one year?

Solution

A l i ce ha s a l o an o f 24, 820. T hi s l o an ha s a s im pl e in t eres t r a t e o f 3.5% p er ye a r . N o p a y m e n t s w i ll b e ma d e o n t h e l o an u n t i l t h e e n d o f o n e ye a r . Ho w m u c h in t eres t w i ll A l i ce p a y o n t hi s l o an a t t h e e n d o f o n e ye a r ?

Interest : 868.7

Solution steps

Translate the problem into an equation:

I = 24820 \cdot 0.035 \cdot 1

Simplify

I = 24820 \cdot 0.035 \cdot 1

Interest : 868.7