Ian borrows $3580 at 31% simple interest per year. When Ian pays the loan back 7 years later, how much interest does Ian pay?
0.31 * 7 * 3580
To calculate the amount of interest Ian pays, we first need to find the simple interest per year.
Simple interest is calculated using the formula:
Simple Interest = Principal × Rate × Time
Where:
Principal = $3580 (the amount borrowed)
Rate = 31% per year (or 0.31 as a decimal)
Time = 7 years
So, the simple interest per year is:
Simple Interest = $3580 × 0.31 × 7
Let's calculate this:
Simple Interest = $389.12 × 7
Simple Interest = $2,723.84
Therefore, Ian pays $2,723.84 in interest over the 7-year period.
To find out how much interest Ian pays, we need to calculate the simple interest on the loan.
The formula to calculate simple interest is:
I = P * r * t
Where:
I = Interest
P = Principal amount (amount borrowed)
r = Annual interest rate (in decimal form)
t = Time (in years)
In this case:
P = $3580
r = 31% = 0.31 (converted to decimal form)
t = 7 years
Now let's plug these values into the formula:
I = 3580 * 0.31 * 7
Calculating this equation:
I = $7856.60
Therefore, Ian pays $7,856.60 in interest.