You take out a 70-day single payment loan for $570 with an interest rate of 16%. What is the amount of the interest?
The interest on the loan is $72.
To calculate the interest, you can use the formula:
Interest = Principal x Rate x Time
Where:
- Principal = the amount of the loan
- Rate = the interest rate as a decimal
- Time = the length of the loan in years (or fractions of a year)
In this case, the principal is $570, the rate is 16% or 0.16 as a decimal, and the time is 70 days, which is approximately 0.1918 years (70/365).
So, plugging these values into the formula:
Interest = $570 x 0.16 x 0.1918
Interest = $72.01
Rounding to the nearest cent, the interest on the loan is $72.