The total amount of interest collected after two years from a $6,000 loan with a simple annual interest rate of 6 percent is equal to
A) $360.
B) $720.
C) $12,360.
D) $6,360.

Question

Quizplus · Accepted Answer

To calculate the total amount of interest collected after two years, we need to use the formula:

Interest= Principal x Rate x Time

Where Principal is the amount of the loan, Rate is the interest rate, and Time is the length of time the loan is taken out for.

In this case, the principal is $6,000, the rate is 6%, and the time is 2 years.

So:

Interest = $6,000 x 0.06 x 2
Interest = $720

Therefore, the correct answer is B.

The Total Amount of Interest Collected After Two Years from a $6,000