Question

A bank charges 5% simple interest on a certain loan. If you borrow $10,000 to buy a car and it takes you 6 years to pay off the loan, how much total will you pay

Answer 1

$13000

Explanation:

Rate = 5% = 5 / 100 = 0.05

Principal (P) = $10,000

Time(T) = 6years

Simple Interest (S.I) = P(1 + rt)

S.I = 10000 (1 + 0.05 * 6)

S.I = 10000*(1.3)

S.I = $13000

The total amount to be paid is $13000