holly is taking out a loan in the amount of $10,000. her choices for the loan are a 4-year loan at 4% simple…

holly is taking out a loan in the amount of $10,000. her choices for the loan are a 4-year loan at 4% simple interest and a 6-year loan at 5% simple interest. what is the difference in the amount of interest holly would have to pay for each of these two loans?\n\na $1,600\nb $3,000\nc $4,600\nd $1,400

holly is taking out a loan in the amount of $10,000. her choices for the loan are a 4-year loan at 4% simple interest and a 6-year loan at 5% simple interest. what is the difference in the amount of interest holly would have to pay for each of these two loans?\n\na $1,600\nb $3,000\nc $4,600\nd $1,400

Answer

Answer:

D. $$1,400$

Explanation:

Step1: Calculate interest for the first loan

$$I_1 = P \times r_1 \times t_1 = 10,000 \times 0.04 \times 4 = 1,600$$

Step2: Calculate interest for the second loan

$$I_2 = P \times r_2 \times t_2 = 10,000 \times 0.05 \times 6 = 3,000$$

Step3: Calculate the difference in interest

$$\text{Difference} = I_2 - I_1 = 3,000 - 1,600 = 1,400$$