Two customers took out loans from a bank.​

Question

Jarrod took out a 5-year loan for $4,000 and paid 3.2% annual simple interest. ​

Harold took out a 7-year loan for $4,000 and paid 3.9% annual simple interest. ​

What is the difference between the amount of interest Jarrod and Harold paid for their loans???

Answer 1

To calculate the amount of interest paid by each customer, we can use the formula:

Interest = Principal * Rate * Time

For Jarrod's loan, we have:
Principal = $4,000
Rate = 3.2% = 0.032
Time = 5 years

Interest = $4,000 * 0.032 * 5 = $640

For Harold's loan, we have:
Principal = $4,000
Rate = 3.9% = 0.039
Time = 7 years

Interest = $4,000 * 0.039 * 7 = $1,092

The difference between the amount of interest paid by Jarrod and Harold is:
$1,092 - $640 = $452.