Megan has a loan of $24,650. This loan has a simple interest rate of 4% per year. What is the amount of interest that Megan will be charged on this loan at the end of one year?

Answer: Simple Interest for one year is: $986

Step-by-step explanation:

Simple interest is applied just to the principal loan.

Compound interest is applied to the principle and the period interest.

Because the question is just for the Simple interest we can use the formula to find the interest:

P*i*n

Where P is the principal (loan) = $ 24,650

i is the simple interest rate: 4%

n is the Period of time = 1 year.

Just Replace.

Therefore the simple interest is: P*i*n = $ 24,650*4%*1 = $986