Question

Tyrell has a bankruptcy on his credit report and therefore pays higher interest rates on his current loans. He calculates that the extra money he pays in additional interest each year, if invested at the rate of 2. 5% for one year, could earn him simple interest totaling $300. How much does Tyrell pay in additional interest each month? a. $90 b. $100 c. $1,000 d. $12,000 Please select the best answer from the choices provided. A B C D.

Answer 1

Based on the information given the amount that Tyrell pay as additional interest each month is c. $1,000.

First step is to find the principal

Simple interest =Principal × Rate × Time

Let solve for P( Principal)

$300 =P× (2.5/100) × 1

$300 = P × 0.025 × 1

$300 / 0.025 = P

P = $12,000

Second step is to calculate the additional Interest each year

Additional Interest each year =$12,000 / 12 month

Additional Interest each year= $1,000

Inconclusion  the amount that Tyrell pay as additional interest each month is c. $1,000.

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Answer 2

Answer:

C. $1,000

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