Questions: Burt takes out a loan for 15,000 from his local bank with a simple fixed interest rate of 7.5%. How much interest will he have paid after 8 years? Select one: a. 7100 b. 12,000 c. 24,000 d. 9,000

Solution Steps

The formula for calculating simple interest is given by:

\[ I = P \times r \times t \]

where:

• \( I \) is the interest,
• \( P \) is the principal amount,
• \( r \) is the rate of interest per year (as a decimal),
• \( t \) is the time in years.

Given:

• Principal amount, \( P = 15,000 \) dollars,
• Rate of interest, \( r = 7.5\% = 0.075 \),
• Time, \( t = 8 \) years.

Substitute these values into the formula:

\[ I = 15,000 \times 0.075 \times 8 \]

Perform the multiplication:

\[ I = 15,000 \times 0.075 \times 8 = 9,000 \]

Final Answer