Two customers took out loans from a bank.%0D%0A%0D%0A• Hank took out a 4-year loan for $5,000 and paid 4.50% annual simple interest%0D%0A• Holly took out a 6-year loan for $5,000 and paid 3.50% annual simple interest%0D%0A%0D%0AWhat is the difference between the amounts of interest Hank and Holly paid for their loans?
To find the difference between the amounts of interest Hank and Holly paid for their loans, we need to calculate the interest for each loan separately.
For Hank's loan:
Interest = principal * rate * time
= $5,000 * 4.50% * 4 years
= $900
For Holly's loan:
Interest = principal * rate * time
= $5,000 * 3.50% * 6 years
= $1,050
The difference in the amounts of interest paid by Hank and Holly is $1,050 - $900 = $150.