Hannah took out a ssimple interest loan of
. The interest rate on the loan is . If
no payments are made, how much money, in
dollars, will she owe at the end of 7 years?

To calculate the total amount Hannah will owe at the end of 7 years on a simple interest loan, you can use the formula for simple interest, which is:

Plugging in the numbers:

So, the total amount owed will be the principal plus the interest:

Therefore, Hannah will owe at the end of 7 years.

Over the years, simple interest loans have been a popular choice for financing because calculating interest is as easy as pie—without the complicated formulas involved in compounded interest! As long as you keep track of the time and rate, you’re golden.

When dealing with loans, one common mistake is forgetting to consider the total time period before making any repayment. By the time 7 years rolls around, it might be surprising to see how much interest adds up, so it’s essential to keep a tab on that! Regular payments can prevent the “loan shock” when the total amount is finally due.