Question

The Kato family takes out a $30,000 home improvement loan. The loan has an annual

interest rate of 6.5%. If the loan is paid back over 12 years instead of 10 years, how
much more interest will they pay?

Answer 1

$3900

Explanation:

Given data

P= $30,000

r= 6.5%

t= 10 years

t= 12 years

Let us find the SI interest after 10 years

SI= PRT/100

SI= 30000*6.5*10/100

SI= 1950000/100

SI= 19500

Let us find the SI interest after 12 years

SI= PRT/100

SI= 30000*6.5*12/100

SI= 2340000/100

SI= 23400

The extra amount paid is

=23400- 19500

=$3900