Question

Find the simple interest owed for the loan. $4,250 at 4% for 1 year

Answer 1

To answer this question, we need to use the formula for simple interest. This formula is as follows:

$I=P\cdot R\cdot T$

From the equation, we have:

• I is the earned (owed) interest.

,

• P is the principal (the invested money.)

,

• R is the rate of interest.

,

• T is the time period of the interest.

From the question, we have:

• P = $4,250

,

• R = 4% = 4/100 = 0.04

,

• T = 1 year

Therefore, we can obtain the interest as follows:

$I=4250\cdot0.04\cdot1\Rightarrow I=170$

Hence, the owed interest will be $170 in a period of one year at a rate of 4%.