Sally takes a loan of $2,500 at a 6% simple rate for 5 years. How much interest will be paid for 3 years?

Question

(Simple Interest Formula is I = prt)

Answer 1

First, we need to calculate the total interest paid over the entire 5-year period using the formula:

I = prt
I = 2,500 x 0.06 x 5
I = $750

So over 5 years, Sally will pay $750 in interest.

To find out how much interest will be paid for just 3 years, we can use the same formula but adjust the time period:

I = prt
I = 2,500 x 0.06 x 3
I = $450

Therefore, Sally will pay $450 in interest for 3 years.