First, calculate the amount of interest Jacob paid:
Interest = Principal x Rate x Time
Interest = $8,000 x 0.042 x 3
Interest = $8,000 x 0.126
Interest = $1,008.00
Next, calculate the amount of interest Christian paid:
Interest = Principal x Rate x Time
Interest = $8,000 x 0.039 x 5
Interest = $8,000 x 0.195
Interest = $1,560.00
The difference between the amounts of interest Jacob and Christian paid for their loans is:
$1,560.00 (Christian's interest) - $1,008.00 (Jacob's interest) = $552.00
Therefore, the difference between the amounts of interest Jacob and Christian paid for their loans is $552.00.
Two customers took out loans from a bank.
• Jacob took out a 3-year loan for $8,000 and paid 4.2% annual simple interest.
• Christian took out a 5-year loan for $8,000 and paid 3.9% annual simple interest.
What is the difference between the amounts of interest Jacob and Christian paid for their loans?
$1,560.00
$635.59
$552.00
$1008.00
1 answer