Connie loaned Sam \(\$1,500\) at a yearly interest rate of 8%. After one year what is the interest owed on this loan?

\(\$120\)

Explanation

The yearly interest charged on this loan is the annual interest rate (8%) multiplied by the amount borrowed \((\$1,500)\). To get the interest charged first convert the interest rate from a percentage to a decimal by dividing by 100 (8 /100) to get 0.08 then multiply 0.08 by \(\$1,500\) to get \(\$120\).
NOTE
When you're dealing with percentages you'll always need to convert the percent to a decimal by dividing by 100 before doing any calculations with it.

Visit our website for other ASVAB topics now!