Calculate the loan discount amount (simple interest)
Channel: Robert Foth
Date: 2011-11-04

Bob borrows $5000 to pay off some bills and catch up on car payments. The bank offers him a discount loan with an advertised rate of 7.5% (simple interest) for a period of 2 years. You want to help Bob by explaining what the discounted loan represents, his net amount of money he will receive (as he may not understand they are not going to give him the full $5000), and find the loan's actual interest rate.