Until June 2002, the simple interest rate on Stafford loans to college students was 5.39% while the student was still in college. How much Interest would a student pay on a $1,500 loan for 2 years?

Question

Mathematics

Roman

13 June, 08:05

Until June 2002, the simple interest rate on Stafford loans to college students was 5.39% while the student was still in college. How much Interest would a student pay on a $1,500 loan for 2 years?

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Answers (1)

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Brodie Campbell · Answer 1

Principal amount of loan taken by a student = $1500

Rate of interest charged by the college = 5.39%

Time for which the loan was taken = 2 years

Then

Interest = Principal * Rate of interest * Time

= 1500 * 5.39% * 2

= 1500 * (5.39/100) * 2

= 15 * 5.39 * 2

= 161.70 dollars

So the amount of interest that the student needs to pay is $161.70. I hope the procedure is clear enough for you to understand.