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If the annual interest is $100 on a 3-year, straight interest-only note, and the interest rate on the note is 5% per year, what is the amount of the loan?

Respuesta :

abiolataiwo2015

Assuming the interest rate on the note is 5% per year, the amount of the loan is $2,000.

Loan amount

Using this formula

Loan amount=Annual interest/Interest rate on the note


Where:

Annual interest=$100

Interest rate on the note=5% or 0.05

Let plug in the formula

Loan amount=$100/0.05

Loan amount=$2,000

Inconclusion assuming the interest rate on the note is 5% per year, the amount of the loan is $2,000.

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