Two customers took out loans from a bank.


Henry took out a 4-year loan for $5,000 and paid 4.2% annual simple interest.
Ingrid took out a 6-year loan for $5,000 and paid 3.9% annual simple interest.
What is the difference between the amounts of interest Henry and Ingrid paid for their loans?


Two customers took out loans from a bank.

Henry took out a 4-year loan for $5,000 and paid 4.2% annual simple interest.
Ingrid took out a 6-year loan for $5,000 and paid 3.9% annual simple interest.
What is the difference between the amounts of interest Henry and Ingrid paid for their loans?


$417

$150

$60

$330

1 answer

To find the amount of interest paid by Henry, we use the formula:
Interest = Principal x Rate x Time

For Henry:
Interest = $5,000 x 4.2% x 4 = $5,000 x 0.042 x 4 = $840

For Ingrid:
Interest = $5,000 x 3.9% x 6 = $5,000 x 0.039 x 6 = $1,170

The difference in interest paid is:
$1,170 - $840 = $330

Therefore, the difference between the amounts of interest Henry and Ingrid paid for their loans is $330.
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