Benson has a bankruptcy on his credit report, so he pays higher interest rates on his current loans. He calculates that the extra money he pays in additional interest each year, if invested at the rate of 2% for one year, could earn him simple interest totaling $180. How much does Benson pay in additional interest each month?

Question

Mathematics

Bryan Good

15 February, 23:45

Benson has a bankruptcy on his credit report, so he pays higher interest rates on his current loans. He calculates that the extra money he pays in additional interest each year, if invested at the rate of 2% for one year, could earn him simple interest totaling $180. How much does Benson pay in additional interest each month?

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Answers (1)

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Aspen Odom · Answer 1

Given:

Interest = 180

term = 1 year

Interest rate = 2%

We need to get the principal amount using the simple interest formula.

Interest = Principal * interest rate * term

180 = P * 2% * 1

180 / 2% = P

9,000 = Principal

Benson pays an additional interest of 9,000 each year. A monthly payment of 750.

9,000 / 12 months = 750 per month.