Question

Pablo borrowed $900
from a credit union for 3
years and was charged simple interest at a rate of 3%
. What is the amount of interest he paid at the end of the loan?

Answer 1

To calculate the simple interest paid on the loan, you can use the formula:

\[
I = P \times r \times t
\]

where:
- \( I \) is the interest,
- \( P \) is the principal amount (the initial amount borrowed),
- \( r \) is the interest rate (as a decimal),
- \( t \) is the time the money is borrowed for (in years).

Given:
- \( P = 900 \) (the amount borrowed),
- \( r = 3\% = 0.03 \) (the interest rate),
- \( t = 3 \) years (the duration of the loan).

Now plug in the values:

\[
I = 900 \times 0.03 \times 3
\]

Calculating that step by step:

1. Calculate \( 0.03 \times 3 = 0.09 \).
2. Then multiply \( 900 \times 0.09 = 81 \).

Thus, the amount of interest Pablo paid at the end of the loan is **$81**.