Question

You purchase a car using a $25,000 loan with a 5% simple interest rate. Suppose you pay the loan off after 4 years. How much interest do you pay on your loan? Show your work. Suppose you pay the loan off after 2 years. How much interest do you save by paying the loan off sooner? asap please will give brainelist.

Answer 1

First step: multiple all.

(25,000) * (.05) * (4)

Second step: Find the answer

(25,000) * (.05) * (4) = $5000 (interest after 5 years) -first answer

Third step: replace the 4 with a 2 to find how much is payed after 2 years.

(25,000) * (.05)* (2)

Step 4: find answer

(25,000) * (.05) * (2) = $2,500 (interest payed after 2 years)-second answer

Final step!: subtract the two interests

$5,000 - $2,500 = $2,500!

You save $2,500 by paying the loan sooner!

Hope this helped :)