Question

Mr. Chavis needed to take out a loan for $74,400 for a 2016 XJ luxury Jaguar sedan. If he takes 5 years to pay off the loan at a rate of 5.5%, how much will he pay in interest at the end of the 5 years?

Answer 1

Mr. Chavis will pay $20,460 in interest at the end of 5 years.

Simple interest will be computed by multiplying the principal to its interest rate and term.

I = P x r x t

P = 74,400
r = 5.5% or 0.055
t = 5 yrs

I = 74,400 x 0.055 x 5
i = 20,460