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?
a $1092
b $640
c $452
d $1732

Answer 1

First, let's find out how much interest Jarrod paid for his loan.

The formula to calculate simple interest is: I = PRT, where:
I = Interest
P = Principal (amount borrowed)
R = Interest rate (as a decimal)
T = Time (in years)

For Jarrod:
P = $4,000
R = 3.2% = 0.032 (as a decimal)
T = 5 years

I = 4000 * 0.032 * 5
I = $640

So, Jarrod paid $640 in interest for his loan.

Now, let's find out how much interest Harold paid for his loan.

For Harold:
P = $4,000
R = 3.9% = 0.039 (as a decimal)
T = 7 years

I = 4000 * 0.039 * 7
I = $1,092

So, Harold paid $1,092 in interest for his loan.

To find the difference between the amount of interest Jarrod and Harold paid, we subtract the interest paid by Jarrod from the interest paid by Harold:

$1,092 - $640 = $452

Therefore, the difference between the amount of interest Jarrod and Harold paid for their loans is $452.

Answer: c $452