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6 August, 15:50

Ella is buying a motorcycle and is taking out a loan in the amount of $15,000. Her choices for the loan are a 36-month loan at 6.50% annual simple interest and a 48-month loan at 7.50% annual simple interest. What is the difference in the amount of interest Ella would have to pay for these two loans?

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Answers (2)
  1. 6 August, 17:25
    0
    Answer:1,575

    Step-by-step explanation:

    Apply the formula I = Prt, where I is interest, P is principle, r is rate, and t is time.

    I = 15,000 (

    6.5

    100

    ) (

    36

    12

    ) = 15,000 (0.065) (3) = 2,925

    I = 15,000 (

    7.5

    100

    ) (

    48

    12

    ) = 15,000 (0.075) (4) = 4,500

    Therefore, 4,500 - 2,925 = 1,575
  2. 6 August, 17:53
    0
    Step-by-step explanation:

    The formula for simple interest is expressed as

    I = PRT/100

    Where

    P represents the principal

    R represents interest rate

    T represents time in years

    I = interest after t years

    Considering the 36-month loan,

    T = 36 months = 36/12 = 3 years

    P = $15000

    R = 6.5%

    Therefore

    I = (15000 * 6.5 * 3) / 100

    I = 292500/100

    I = $2925

    Considering the 48-month loan loan,

    T = 48 months = 48/12 = 4 years

    P = $15000

    R = 7.5%

    Therefore

    I = (15000 * 7.5 * 4) / 100

    I = 450000/100

    I = $4500

    The difference in the amount of interest Ella would have to pay for these two loans is

    4500 - 2925 = $1575
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