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 find the difference in the amount of interest paid by Jarrod and Harold, we need to calculate the interest paid by each individual.

For Jarrod's loan:

Interest = Principal * Rate * Time
= $4,000 * 0.032 * 5
= $640

For Harold's loan:

Interest = Principal * Rate * Time
= $4,000 * 0.039 * 7
= $1,092

The difference in the amount of interest paid is:
$1,092 - $640 = $452