Two customers took out loans from a bank.
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???
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.