### Home > MC2 > Chapter 8 > Lesson 8.2.6 > Problem 8-85

8-85.

Use the equation for simple interest from the Math Notes box in this lesson.

Interest = Prt where:

P = Principal

r = rate

t = time

Interest = ($2500)(0.04)(12 months)

($2500)(0.04) = $100 dollars per month in interest

($100)(12 months) = $1200 interest over 12 months

How much total money does Ida owe under this option if her borrowed amount is $2500 and her interest would be $1200?

Use the same interest formula from part (a).

Interest = (principal)(interest rate)(weeks in a year)

There are 52 weeks in a year.

Ida owes $3800 with this option. Be sure to show how to get this answer and explain which one of the two loan options is better and why.