bill takes a loan of $8,000 at a 13% simple interet rate for 6 years. How much interest will he pay after 3 years?
To calculate the amount of interest Bill will pay after 3 years on a loan of $8,000 with a 13% simple interest rate:
Step 1: Calculate the annual interest:
Annual interest = Principal x Interest rate
Annual interest = $8,000 x 0.13
Annual interest = $1,040
Step 2: Divide the annual interest by the number of years to get the interest paid after three years:
Interest after 3 years = Annual interest / number of years
Interest after 3 years = $1,040 / 6
Interest after 3 years = $173.33
Therefore, Bill will pay $173.33 in interest after 3 years.
To calculate the amount of interest Bill will pay after 3 years, we need to use the formula for simple interest:
Interest = Principal × Rate × Time
In this case, the principal (loan amount) is $8,000, the rate is 13%, and the time is 3 years.
Let's break down the calculation step by step:
1. First, convert the percentage rate to a decimal by dividing it by 100:
Rate = 13% ÷ 100 = 0.13
2. Next, substitute the values into the formula:
Interest = $8,000 × 0.13 × 3
3. Multiply the principal, rate, and time together:
Interest = $8,000 × 0.13 × 3 = $3,120
Therefore, after 3 years, Bill will pay $3,120 in interest.