If I took a $3000 three year loan with an 24% yearly interest rate what would be the total interest paid??

Expert Answers

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The interest paid would depend on whether you are paying simple interest or compound interest.

For simple interest, the principal remains the same over the 3 years, and interest is charged at 24% per year. The interest in this case is 3*3000*0.24 = $2160

For compound interest, the principal increases every year by the interest charged in the last year. The interest paid in this case is: 3000*(1.24^3 - 1) = $2719.87

The interest paid on the loan would be $2160 in the case of simple interest and $2719.87 in the case of compound interest.

Approved by eNotes Editorial Team
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