Question
Understanding Interest Practice
Complete this assessment to review what you've learned. It will not count toward your grade.
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Question
Determine the accrued interest amount of a $5,000 student loan with a simple interest rate of 5.4% over a period of 8 years. Round the answer to two decimal places as needed.(1 point)
The accrued interest amount is $
.
Remaining Attempts : 3
Answers
GPT-4o mini
To calculate the accrued interest on a loan using simple interest, you can use the formula:
\[
\text{Interest} = P \times r \times t
\]
Where:
- \( P \) is the principal amount (initial loan amount),
- \( r \) is the annual interest rate (in decimal form),
- \( t \) is the time in years.
In this case:
- \( P = 5000 \)
- \( r = 5.4\% = 0.054 \)
- \( t = 8 \)
Now plug the values into the formula:
\[
\text{Interest} = 5000 \times 0.054 \times 8
\]
Calculating this step-by-step:
1. Multiply the interest rate by the time:
\[
0.054 \times 8 = 0.432
\]
2. Now multiply this by the principal:
\[
5000 \times 0.432 = 2160
\]
Therefore, the accrued interest amount is:
\[
\text{Accrued Interest} = 2160
\]
So the accrued interest amount is **$2160.00**.
\[
\text{Interest} = P \times r \times t
\]
Where:
- \( P \) is the principal amount (initial loan amount),
- \( r \) is the annual interest rate (in decimal form),
- \( t \) is the time in years.
In this case:
- \( P = 5000 \)
- \( r = 5.4\% = 0.054 \)
- \( t = 8 \)
Now plug the values into the formula:
\[
\text{Interest} = 5000 \times 0.054 \times 8
\]
Calculating this step-by-step:
1. Multiply the interest rate by the time:
\[
0.054 \times 8 = 0.432
\]
2. Now multiply this by the principal:
\[
5000 \times 0.432 = 2160
\]
Therefore, the accrued interest amount is:
\[
\text{Accrued Interest} = 2160
\]
So the accrued interest amount is **$2160.00**.
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