Question

Diana is taking out a loan to purchase a used Nissan Altima. She takes out $12,000 with a 5% simple interest rate. How much interest will she have paid after 6.5 years?

Answer 1

Diana will have paid $600 in interest after 6.5 years.

Step-by-step explanation:

To calculate the amount of interest Diana will have paid after 6.5 years, we need to use the formula: Interest = Principal × Rate × Time. In this case, the principal is $12,000 and the rate is 5%. As interest is simple, the formula simplifies to: Interest = Principal × Rate.

Therefore, the interest Diana will have paid after 6.5 years can be found by multiplying $12,000 by 5%.

First, convert the percentage into a decimal by dividing it by 100: 5% ÷ 100 = 0.05. Then, multiply 0.05 by $12,000:

Interest = $12,000 × 0.05 = $600

Therefore, Diana will have paid $600 in interest after 6.5 years.