How much interest will be paid in 1 year for a loan of $2800 at 5 1/2% simple interest?

Hey there!

To find how much interest you will pay on a loan, you can use the following equation:

, where:

A = final amount of money
P = Principal (initial amount of money)
r = interest rate (as a decimal, divide a percentage by 100 to get its decimal form)
n = number of times a year
t = years
In this case, this is all of the information that you know:

A = what we want to find
P = $2800
r = 0.055
n = 1 time
t = 1 year

All you need to do is plug in these values and solve for A. 











The final amount that will be paid (interest and principal) is $2954. However, the questions asks for interest alone, so just subtract the principal from the total amount of money we just found. 

2954 – 2800 = $154

$154 will be paid in interest. 

Hope this helped you out! :-)

Absolute value graph shifted point 5 up