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14 December, 19:29

Jim wants to borrow $7200. Bank M offers a 3% interest rate for a 5-year term. Bank K offers a 4% interest rate for a 5-year term. How much more interest will Jim pay if he takes the $7200 loan at the 4% interest rate for a 5-year term?

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  1. 14 December, 19:46
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    Given:

    Principal : 7,200

    Interest Rate:

    Bank M : 3%

    Bank K : 4%

    Term : 5 years

    Interest = Principal * Interest Rate * term

    Bank M:

    I = 7,200 * 0.03 * 5

    I = 1,080

    Bank K:

    I = 7,200 * 0.04 * 5

    I = 1,440

    1,440 - 1,080 = 360

    Jim will pay 360 more interest if he takes the $7,200 loat at a 4% interest rate for a 5-year term.
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