Question

It costs $36,736 to repay a loan of $20,500 at 6.6% annual simple interest. How much interest would you pay each year? Pls help :(

Answer 1

I = Prt

I = Interest = 36736

P = Principal = 20,500

r = Intrest rate = 6.6% = 0.066

t = time

first we have to solve for t

I = Prt

t = I/Pr = 36736/(20,500)(0.066) = 36736/1353 = 27.15

So it would take 27.15 years to pay

The interest per year is when t = 1

I = Prt = (20,500)(0.066)(1) = 1353

So, each year the interest would be 1,353