# loan interest problem

• Dec 9th 2008, 11:31 AM
waterboy
loan interest problem
James brown took out a loan for 2,400 to purchase holiday gifts. the annual interest rate is 2.5% the loan is due in 6 months how much will james have to pay back at the end of 6 months. remember time is in years

I did this

(2,400)(0.0125)(1)= 30

can somebody check this and if it is wrong show me the right answer.
• Dec 9th 2008, 11:33 AM
waterboy
is this right
James brown took out a loan for 2,400 to purchase holiday gifts. the annual interest rate is 2.5% the loan is due in 6 months how much will james have to pay back at the end of 6 months. remember time is in years

I did this

(2,400)(0.025)(1)= 60

can somebody check this and if it is wrong show me the right answer.
• Dec 9th 2008, 12:20 PM
chabmgph
Quote:

Originally Posted by waterboy
James brown took out a loan for 2,400 to purchase holiday gifts. the annual interest rate is 2.5% the loan is due in 6 months how much will james have to pay back at the end of 6 months. remember time is in years

I did this

(2,400)(0.025)(1)= 60

can somebody check this and if it is wrong show me the right answer.

Hi waterboy,

Well, if you mean 60 is what he is going to pay back at the end of 6 months, you know it doesn't sound right since he borrowed 2400.

The part you are calculating is the interest. but the loan is for 6 months while the interest rate is for the whole year. So try again.