Question

miguel takes out a loan that adds interest each year on the initial amount. what is the interest miguel borrowed $5,000 at an annual interest rate of 4.5% for 15 years? use the formula I = Prt, where I is the interest, P is the principal or initial investment, r is the interes rate per year, and t is the number of years.)

Answer 1

To calculate the interest Miguel will pay on a loan of $5,000 at an annual interest rate of 4.5% for 15 years, we can use the formula:

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

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

Let's plug in the values:

- \( P = 5,000 \) (the loan amount),
- \( r = 4.5\% = 0.045 \) (the interest rate in decimal form),
- \( t = 15 \) years.

Now we can calculate the interest:

\[
I = 5000 \times 0.045 \times 15
\]

Calculating inside the parentheses first:

\[
I = 5000 \times 0.045 = 225
\]

Now multiplying by 15:

\[
I = 225 \times 15 = 3375
\]

Therefore, the total interest that Miguel will pay over 15 years is **$3,375**.