Mary needs to borrow $ 12,000. She can borrow the money at 4.5% simple interest for 6 yr or she can borrow at 4% with interest compounded continuously for 6уг.

Question

How much total interest would Mary pay at 4.5% simple interest ?

Answer 1

To calculate the total interest Mary would pay at 4.5% simple interest, we can use the formula:

Total Interest = Principal x Rate x Time

Where:
Principal = $12,000
Rate = 4.5% or 0.045
Time = 6 years

Plugging in the values, we get:

Total Interest = $12,000 x 0.045 x 6
Total Interest = $12,000 x 0.27
Total Interest = $3,240

Therefore, Mary would pay a total of $3,240 in interest at 4.5% simple interest over 6 years.