Two customers took out loans from a bank.
Henry took out a 4-year loan for $5,000 and paid 4.2% annual simple interest.
Ingrid took out a 6-year loan for $5,000 and paid 3.9% annual simple interest.
What is the difference between the amounts of interest Henry and Ingrid paid for their loans?
Two customers took out loans from a bank.
Henry took out a 4-year loan for $5,000 and paid 4.2% annual simple interest.
Ingrid took out a 6-year loan for $5,000 and paid 3.9% annual simple interest.
What is the difference between the amounts of interest Henry and Ingrid paid for their loans?
$417
$150
$60
$330
To find the amount of interest paid by Henry, we use the formula:
Interest = Principal x Rate x Time
For Henry:
Interest = $5,000 x 4.2% x 4 = $5,000 x 0.042 x 4 = $840
For Ingrid:
Interest = $5,000 x 3.9% x 6 = $5,000 x 0.039 x 6 = $1,170
The difference in interest paid is:
$1,170 - $840 = $330
Therefore, the difference between the amounts of interest Henry and Ingrid paid for their loans is $330.