Question

Michelle is trying to buy a car that costs $35,550, and she has saved up $20,700. She borrowed the remaining amount that she needed from a finance company. She now owes a total of $19,365 to the finance company. How much is the simple interest that accrued on this loan based on the original amount borrowed?

Answer 1

$4,515 in simple interest

Explanation:

Price of the car = 35,550

Amount saved = 20,700

Amount borrowed = Price of car- amount saved; 35,550-20700 = 14,850

Amount owed at the moment = 19,365

To find the simple interest charged= Total owed currently- amount initially borrowed;

Simple interest = 19,365 - 14,850 = 4,515

Therefore, Michelle's loan accrued $4,515 in simple interest.