Final answer:
To determine the total amount Spike has to pay for the car, we calculate the simple interest over 6 years at a 5% rate and add it to the principal amount of $14,000. The total interest comes to $4,200, making the total amount payable $18,200.
Step-by-step explanation:
Calculating the Total Payment for a Car Loan
The student is interested in finding out the total amount they would need to pay for a car after getting a loan. To determine this, we need to calculate the total interest on the loan and then add it to the principal amount, which is the original price of the car. Given that Spike is buying a new car for $14,000, with a loan at a 5% interest rate over 6 years, we can calculate the total interest using the formula for simple interest: I = PRT, where 'I' is the interest, 'P' is the principal amount, 'R' is the annual interest rate in decimal form, and 'T' is the time in years.
To find the total cost including interest:
I = PRT
I = 14000 * 0.05 * 6
I = $4,200
Then, we add the interest to the principal amount to find the total cost:
Total cost = Principal + Interest
Total cost = $14,000 + $4,200
Total cost = $18,200
Therefore, Spike will have to pay a total of $18,200 for the car over the period of the loan.