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Explain Bot To calculate the interest you will pay on a loan, you can use the formula:
Interest = Principal × Rate × Time
In this case, the principal (P) is $900, the interest rate (R) is 12%, and the time (T) is 1 year.
Now, let's substitute these values into the formula and calculate the interest:
Interest = $900 × 12% × 1 year
First, convert the percentage rate to a decimal by dividing it by 100:
12% ÷ 100 = 0.12
Then substitute the values into the formula:
Interest = $900 × 0.12 × 1
Multiply the principal, rate, and time:
Interest = $108
Therefore, you will pay $108 in interest on a $900 loan over 1 year with a 12% interest rate.