Question

problem set

1. enrique takes out a student loan to pay for his college tuition this year. find the interest on the loan if he borrowed $2,500 at an annual interest rate of 6% for 15 years.

Explanation:

Step1: Recall the simple interest formula

The formula for simple interest is \( I = P \times r \times t \), where \( I \) is the interest, \( P \) is the principal amount, \( r \) is the annual interest rate (in decimal form), and \( t \) is the time in years.

Step2: Convert the interest rate to decimal

The annual interest rate is \( 6\% \), so in decimal form, \( r = \frac{6}{100} = 0.06 \).

Step3: Identify the values of \( P \), \( r \), and \( t \)

Here, \( P = \$2500 \), \( r = 0.06 \), and \( t = 15 \) years.

Step4: Calculate the interest

Substitute the values into the formula: \( I = 2500 \times 0.06 \times 15 \).
First, calculate \( 2500 \times 0.06 = 150 \).
Then, calculate \( 150 \times 15 = 2250 \).

Answer:

The interest on the loan is \(\$2250\).