Some lenders allow you to repay a loan​ early, which reduces the amount of interest you pay. Assume 365 days in a year.
To cover some unexpected​ expenses, you take out a simple interest loan for ​$2500 at a rate of 6.1​% for up to one year. The lender allows you to repay the loan anytime during the year. Answer parts​ (a) -​ (c).
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Part 1
a. Find the interest you will pay if you repay the loan at the end of the year.

To calculate the interest on a simple interest loan, we can use the following formula:

\[
I = P \times r \times t
\]

Where:
- $I$ is the interest,
- $P$ is the principal amount (the loan amount),
- $r$ is the annual interest rate (as a decimal),
- $t$ is the time in years.

For this problem:
- $P = 2500$,
- $r = 6.1\%$ or $0.061$,
- $t = 1$ year (since we are repaying at the end of the year).

Now, calculate the interest:

\[
I = 2500 \times 0.061 \times 1 = 152.50
\]

### Answer:
The interest you will pay if you repay the loan at the end of the year is **$152.50**.

Would you like further details or clarification?

Here are 5 related questions for further exploration:
1. What would the interest be if the loan were paid after 6 months?
2. How much is the total amount to be repaid after 1 year?
3. What is the formula for simple interest, and how does it differ from compound interest?
4. How does the interest change if the loan amount or interest rate increases?
5. What is the effect of paying off the loan early on the total interest?

**Tip:** Always convert percentage rates to decimals in calculations by dividing by 100!

Some lenders allow you to repay a loan​ early, which reduces the amount of interest you pay. Assume 365 days in a year. To cover some unexpected​ expenses, you take out a simple interest loan for ​$2500 at a rate of 6.1​% for up to one year. The lender allows you to repay the loan anytime during the year. Answer parts​ (a) -​ (c). Part 1 a. Find the interest you will pay if you repay the loan at the end of the year.

Learn how to calculate the simple interest on a $2500 loan at a rate of 6.1% for a year. This problem uses the formula I = P × r × t to find the interest payable at the end of the year, which comes to $152.50. Ideal for students in Grades 9-12.

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