Question

Josh is buying a RV and is taking out a loan in the amount of $20,000. His choices for the loan are a 5-year loan at 6.00% annual simple interest and a 6-year loan at 7.00% annual simple interest. What is the difference in the amount of interest Josh would have to pay for these two loans? A) $1,200 B) $2,000 Eliminate C) $2,400 D) $3,000

Answer 1

C) 2400

Explanation:

Please trust me!

PLEASE TAKE CARE OF YOURSELF!

DONT WORRY ITS NOT OVER! <3

Answer 2

Answer: C) $2,400

Explanation:

The formula for simple interest is expressed as

I = PRT/100

Where

P represents the principal

R represents interest rate

T represents time in years

I = interest after t years

Considering the 5-year loan

T = 5 years

P = $20000

R = 6%

Therefore

I = (20000 × 6 × 5)/100

I = 600000/100

I = $6000

Considering the 6-year loan

T = 6 years

P = $20000

R = 7%

Therefore

I = (20000 × 7 × 6)/100

I = 840000/100

I = $8400

The difference in the amount of interest Josh would have to pay for these two loans is

8400 - 6000 = $2400