Question

Raymond bought a car for $40,000. He took a 20,000 loan from a bank at an interest rate of 15% per year for a 5 - year period. What is the total amount ( interest and loan) that he would have to pay rhe bank at the end of 5 years

Answer 1

To find the total amount that Raymond would have to pay the bank at the end of 5 years, you need to calculate the interest on the loan and add it to the principal amount. Therefore, Raymond would have to pay a total amount of 35,000 to the bank at the end of 5 years.

Step-by-step explanation:

To find the total amount that Raymond would have to pay the bank at the end of 5 years, we need to calculate the interest on the loan and add it to the principal amount.

First, let's calculate the interest on the loan:

Interest = Principal * Rate * Time
Interest = 20,000 * 0.15 * 5
Interest = 15,000

Next, we add the interest to the principal amount:

Total amount = Principal + Interest
Total amount = 20,000 + 15,000
Total amount = 35,000

Therefore, Raymond would have to pay a total amount of $35,000 to the bank at the end of 5 years.

Answer 2

$35,000

Step-by-step explanation:

The amount that would be repaid = amount borrowed + interest earned on loan

interest earned on deposit can be determined by determining the simple interest

Simple interest = principal x time x interest rate

principal = the amount deposited = 20,000

Time = the duration of the deposit =5

interest rate = the percentage on deposit that would be earned = 15

20,000 x 5 x 0.15 = $15,000

total = 20,000 + 15,000 = $35,000