Question

15. A car loan is made by Sharon for the purchase of a $27,000 JEEP.If she pays only 1.9% simple interest for the 4 year loan,a) What is the interest she must pay?b) What is the total she must pay back?

Answer 1

Given:

Principal, P = $27,000

Interest rate, R = 1.9%

Time, T = 4

Let's solve for the following.

(a) What is the interest she must pay?

To find the interest apply the simple interest formula:

`I=(P\ast R\ast T)/(100)`

Substitute values into the formula:

`\begin{gathered} I=(27000\ast1.9\ast4)/(100) \\ \\ I=(205200)/(100) \\ \\ I=2052 \end{gathered}`

Therefore, the interest she must pay is $2,052

(b) What is the total she must pay back?

To find the total she must pay, add the interest and the principal amount.

Total Amount = Principal + Interest

Total Amount = 27000 + 2052 = 29,052

Therefore, the total amount she must pay is $29,052

ANSWER:

(a) $2,052

(b) $29,052