Two customers took out loans from a bank.%0D%0A%0D%0A• Hank took out a 4-year loan for $5,000 and paid 4.50% annual simple interest%0D%0A• Holly took out a 6-year loan for $5,000 and paid 3.50% annual simple interest%0D%0A%0D%0AWhat is the difference between the amounts of interest Hank and Holly paid for their loans?

Answer 1

To find the difference between the amounts of interest Hank and Holly paid for their loans, we need to calculate the interest for each loan separately.

For Hank's loan:
Interest = principal * rate * time
= $5,000 * 4.50% * 4 years
= $900

For Holly's loan:
Interest = principal * rate * time
= $5,000 * 3.50% * 6 years
= $1,050

The difference in the amounts of interest paid by Hank and Holly is $1,050 - $900 = $150.