Answer: Simple Interest for one year is: $986
Step-by-step explanation:
Simple interest is applied just to the principal loan.
Compound interest is applied to the principle and the period interest.
Because the question is just for the Simple interest we can use the formula to find the interest:
P*i*n
Where P is the principal (loan) = $ 24,650
i is the simple interest rate: 4%
n is the Period of time= 1 year.
Just Replace.
Therefore the simple interest is: P*i*n = $ 24,650*4%*1 = $986
