Question

1. jayden takes out a loan of $18,400 to buy equipment for his small business. the loan has a simple interest rate of 4% per year. no payments will be made on the loan until the end of one year. how much interest will jayden pay on this loan at the end of the year?

Explanation:

Step1: Recall 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: Identify values

Here, $P = \$18400$, $r = 4\% = 0.04$ (converted to decimal), and $t = 1$ year.

Step3: Substitute values into formula

Substitute the values into the formula: $I = 18400 \times 0.04 \times 1$.

Step4: Calculate the interest

First, calculate $18400 \times 0.04$. $18400\times0.04 = 736$. Then multiply by $1$ (which doesn't change the value), so $I = 736$.

Answer:

$\$736$