Question

Jasper borrowed $15,500 for college tuition at an annual interest rate of 4%. He pays the loan back at the end of 8 years. In the first box, enter the total interest paid on the loan. In the second box, enter the total amount paid.

Answer 1

Total interest paid - $4960

Total money paid - $20460

Explanation:

1. Approach;

First, one has to find the interest paid every year. This can be found by multiplying the annual interest rate by the total amount borrowed. One must multiply the amount paid each year in interest by the total year number of years the interest has been paid, to find the total interest paid. To find the total amount paid, one must add the total interest paid to the amount borrowed.

2. Finding the interest paid each year

One has to multiply the annual interest rate by the total amount borrowed;

15500 - the amount borrowed

4% - interest rate

15500 + 0.04 = 620

3. Finding the total interest paid

Now one must multiply the interest paid each year by the total interest years the interest has been paid

620 - paid in interest each year

8 - years paid

620 * 8 = 4960

4. Finding the amount total paid

Add the amount borrowed to the total interest paid

15500 - the amount borrowed

4960 - interest paid

15500 + 4960 = 20460