What was Angus's interest benefit from his low-interest loan in a year with a prescribed rate of 5.50%?

To determine Angus's interest benefit from a low-interest loan, we can calculate the potential interest he would have paid if the loan had been charged at the prescribed rate of 5.50%. The interest benefit essentially represents the favor Angus is receiving by paying a lower interest rate in comparison to the market rate.

The calculation process involves applying the prescribed rate to the outstanding balance of the loan for a year. If we assume Angus was paying a lower rate, the difference between the interest amounts at the prescribed rate and the lower rate (if any) would constitute his benefit.

For example, if the loan had a principal amount of $5,000, the interest at the prescribed rate could be calculated as follows:

1. Multiply the principal amount by the prescribed interest rate:

• $5,000 * 5.50% = $275.

In this scenario, if Angus was paying significantly less, let's say he was paying 2%, his interest payment would have been $100. The benefit for him would then be the difference of $275 - $100 = $175, showcasing how much he saves due to a favorable loan term.

Considering this type of calculation and assuming a context where the specific interest benefit has resulted in $277.40