Question

Howie wants to get a car loan with 4% simple interest rate. If the car

costs $25,000, how much would Howie need to pay back at the end of
one year, including the interest?

Answer 1

Answer: $26,000

Step-by-step explanation:

i = simple interest

P = 25,000 = amount loaned

r = interest rate in decimal form = 0.04

t = number of years = 1

So,

i = P*r*t

i = 25000*0.04*1

i = 1000

Howie needs to pay $1,000 in interest on top of the $25,000 loaned to him. In total, he needs to pay back 1,000+25,000 = 26,000 dollars.