Question

You need to buy a car to help you get to school and work. You take out a $8,000 loan with a 9.25% annual simple interest rate to be paid off over 66 months.

A) how much interest will you be charged?


B) what is the total amount to be paid?

Answer 1

A) Interest=$4,070

B) Total amount=$12,070

Explanation:

A) From the question,

Principal,P =$8,000

Rate,R=9.25%=0.0925

Time,T=66 months=5.5yrs

We can calculate the interest by the relation,

I=PRT

By substitution,we obtain

`I=8,000 * 0.0925 *5.5`

I=$4,070

B) Adding the principal and the interest gives the total amount to be paid.

Implies that,

Total Amount=$8,000+$4,070=$12,070