### Home > ACC7 > Chapter cc27 > Lesson cc27.1.8 > Problem 7-91

First calculate how much money the Jones need to borrow.

$40,000 − $23,000 = $17,000

Calculate the amount of interest that is added per month.

$17,000(0.02) = $340

Since the Jones can pay off the loan in 6 months, multiply the amount of interest added per month by 6.

$340(6) = $2,040

Finally, add that amount to the original to find the amount of money the Jones need to pay.

$17,000 + $2,040 = $19,040

Do you see how the simple interest formula was used?

I = (17,000)(0.02)(6)