Question

Dominick borrowed $6,000 from a credit union at 9% simple interest for 30 months. What is the total amount of interest Dominick will pay throughout the life of the loan?$1350$1325$1300$1250None of these choices are correct.

Answer 1

$1350

Explanation

the simple interest formula is given by:

$\begin{gathered} I=\text{P}\cdot\text{R}\cdot\text{T} \\ \text{where} \\ I\text{ is the interest} \\ P\text{ is the principal amount } \\ r\text{ is the interest rate} \\ \text{and t is the time ( in years)} \end{gathered}$

Step 1

convet the time from months to years

use:

$1\text{ year}\rightarrow12\text{ months}$

so

$30\text{ months(}\frac{1\text{ year}}{12\text{ months}}\text{)=2.5 years}$

Step 2

Let

time=2.5 years

Interest= I

interest rate(r)=9%=0.09

Principal(p)=6000

Now, replace.

$\begin{gathered} I=\text{P}\cdot\text{R}\cdot\text{T} \\ I=\text{\ 6000 }\cdot0.09\cdot2.5 \\ I=1350 \end{gathered}$

therefore the answer is $1350

I hope this helps you