Question

Calculate simple interest on $4000 loan with interest rate of 9% for 2 yrs

Answer 1

To calculate simple interest, you can use the formula:

\[
\text{Simple Interest} = P \times r \times t
\]

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

Given:
- \( P = 4000 \) (the loan amount),
- \( r = 9\% = 0.09 \) (the interest rate),
- \( t = 2 \) (the time in years).

Now plug the values into the formula:

\[
\text{Simple Interest} = 4000 \times 0.09 \times 2
\]

\[
\text{Simple Interest} = 4000 \times 0.18 = 720
\]

The simple interest on a $4000 loan at an interest rate of 9% for 2 years is **$720**.