Question

The Carlisles borrowed $94,000 to buy their first home. The interest rate on their loan was 7.5% for 20 years. How much interest will they have paid after 20 years?

Answer 1

To find the total amount of interest paid by the Carlisles on a $94,000 loan at a rate of 7.5% over 20 years, assuming simple interest, multiply the principal ($94,000) by the rate (0.075) and the time (20 years) to get $141,000.

Step-by-step explanation:

The question revolves around calculating the total amount of interest on a home loan. The Carlisles have a loan of $94,000 at a rate of 7.5% over 20 years. Since the type of interest (simple or compound) isn't specified, we'll need to clarify this with the student. If simple interest is used, the calculation would be:

Interest = Principal × Rate × Time
Interest = $94,000 × 0.075 × 20
Interest = $141,000

So, the Carlisles would pay $141,000 in interest over 20 years if simple interest is applied. This does not take into account any repayments of the principal over time which would affect the actual amount of interest paid if the interest is compounded.