Thread: 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.

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.

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.