Question

Jasmine is borrowing $5,200 to purchase her first used car. She can take out a loan

from the car dealership for 42 months at an 8% annual simple interest, or she can
borrow the money from her bank for 36 months at a 7% annual simple interest
rate.
Calculate the interest charged for the car dealership loan.


Answer 1

$1456

Explanation:

5200 × 8% = $416(interest in 1 yr/12mnths)

42months ÷ 12months(1year) = 3.5 yrs

$416 × 3.5 yrs = $1456(interest in 42mnths/3.5yrs)