Two customers took out loans from a bank.
• Monika took out a 4-year loan for $10,000 and paid 5.2% annual simple interest.
• Saul took out a 6-year loan for $10,000 and paid 4.9% annual simple interest.
What is the difference between the amounts of interest Monika and Saul paid for their loans?
$940.00
$80.00
$860.00
$1076.62
To calculate the difference in the amounts of interest Monika and Saul paid for their loans, we first need to find how much interest each of them paid.
For Monika:
Interest = Principal x Rate x Time
Interest = $10,000 x 0.052 x 4
Interest = $10,000 x 0.208
Interest = $2,080
For Saul:
Interest = Principal x Rate x Time
Interest = $10,000 x 0.049 x 6
Interest = $10,000 x 0.294
Interest = $2,940
Now, let's find the difference between the interest amounts:
$2,940 - $2,080 = $860
Therefore, the difference between the amounts of interest Monika and Saul paid for their loans is $860.00.