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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?

Answer :

difference between the amount of interest Henry and Ingrid paid for theirs loans is Henry is $8.4/year and Ingrid will pay $11.7/year. Difference is 3.3 Henry would pay less then Ingrid per year.

Step-by-step explanation:

  • Create two rows and columns of Total year,amount,interest,1-6 years.
  • simple interest is based on P = Principal,N= number of years, r rate of interest.
  • formula= PNR/100.
  • Principal amount is the loan amount acquired.
  • N is the number of years you opting the loan.
  • R rate of interest is annual simple interest applied for the loans amount.
  • Analysis shows increases number year has high rate of interest.

Answer:

$330

Step-by-step explanation:

Formula for simple interest is

A = P(1+rt)

P = 5000

r = 4.2%

t = 4    4.2% * 4 = 0.168  

5000(1+.168)  = 5000 * 1.168 = 5,840

So... Henry paid $840 in interest

For Ingrid follow the same formula  3.9% * 6 = 0.234 + 1 = 1.234

5000 * 1.234 = 6170 (so Ingrid paid 1170 in interest)

1170 - 840 = 330

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