Question

Kala took out a loan for 5 months and was charged simple interest at an annual rate of 6 % . If the amount of the loan was $ 400 , what is the amount of interest she had to pay?

Answer 1

Answer:

$10

Step-by-step explanation:

Interest rate of 6% means ,She had to pay 6 percent of $400 in a year as Interest

Which is 6×$\frac{400}{100}$ = $ 24 (In 12 months)

So, In one month she had to pay $2.

Thus,

In 5 months she had to pay $10 as Interest

Answer 2

Answer: $10

Step-by-step explanation:

Formula for calculating interest= PRT ÷ 100 where,

P = Principal

R = Rate

T = Time

P= $400

R= 6%

T = 5 months

Note that there are 12 months in a year.

Simple Interest= PRT/100

= (400 × 6 × 5) ÷ (12 × 100)

= 12000 ÷ 1200

= 10

The simple interest is $10