Problem 965

Find the interest paid on a loan of 2300 for two years at a simple interest rate of 12% per year.     <span style="text-decoration: underline;"><em><strong>Solution:-</strong></em></span>     To find the interest, use the simple interest formula  I = PRT  where  I is interest, P is the principle, R is the rate, and T is the time.  Principal is the amount of money borrowed or invested. Identify the principal.  P  =2300

Rate is the percent of the principal paid as interest per time period. Identify the rate.

R = 12%

Time is the number of days, months, or years that the money is borrowed or inversed.

Identify the time.

T = 2 years

Substitute values determined above for P,R, and T in the simple interest formula.

I = 2300(12%)(2)  =2,300(0.12)(2)

= 552  Thus, the interest on the load is552.


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