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?

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.