ted takes out a student loan to pay for his college tuition this year. Find the interest on the loan if he borrowed $2,500 at an annual interest rate of 6% for 15 years. Could someone help step by step, I cant seem to get it. Thank you
I = PRT
I = 2,500 * 0.06 * 15
I = ?
I get 2,250. Thank you Ms. Sue for making it easy to understand.
You're welcome, Sam.
To find the interest on the loan, we can use the formula: Interest = Principal x Rate x Time.
Step 1: Convert the annual interest rate to a decimal. The annual interest rate is 6%, so it will be 0.06 when expressed as a decimal.
Step 2: Calculate the interest over the loan period. In this case, Ted borrowed $2,500 for 15 years. Plug in these values into the formula:
Interest = Principal x Rate x Time
Interest = $2,500 x 0.06 x 15
Step 3: Calculate the interest:
Interest = $2,500 x 0.06 x 15
Interest = $2,500 x 0.9
Interest = $2,250
Therefore, the interest on the loan is $2,250.