Question

Leo buys a new car for $17,600. The simple interest rate is 8.4% and the amount of loan (plus simple interest) is repayable in 5 years. What is the total amount that must be repaid?

Answer 1

Solution:

Given;

$P=17,600,r=8.4\text{ \%,}=0.084,t=5$

The simple interest, I, is;

$\begin{gathered} I=17600\times0.084\times5 \\ \\ I=7392 \end{gathered}$

Thus, the amount to be repaid is;

$\begin{gathered} A=P+I \\ \\ A=17600+7392 \\ \\ A=24992 \end{gathered}$

The amount that must be repaid is $24,992