Question

Jacob borrows $10 at 2.2% simple interest per month.
When Jacob pays the loan back 6 years later, how much
interest does Jacob pay?

A. $25.84
B. $15.84
C. $10.22
D. $5.84

Answer 1

Given:

Principal = $10

Rate of simple interest = 2.2% per month

Number of years = 6

To find:

The value of interest.

Solution:

Formula for simple interest is:

$S.I.=\dfrac{P\times r\times t}{100}$          ...(i)

Where, P is principal, r is rate of interest in % and t is the time period.

Here the rate of interest is defined for per month. So, the time period is also the number of months.

$t=12\times 6$             [ 1 year = 12 months ]

$t=72$

Putting P=10, r=2.2 and t=72 in (i), we get

$S.I.=\dfrac{10\times 2.2\times 72}{100}$

$S.I.=\dfrac{1584}{100}$

$S.I.=15.84$

The simple interest is $15.84.

Therefore, the correct option is B.