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salantis [7]
3 years ago
11

3. You purchase a car using a $20,000 loan with a 5% simple interest rate.

English
1 answer:
ira [324]3 years ago
3 0
So, in order to solve for interest, you use this, I=Prt
P= principal, initial deposit, 20,000
R= interest rate, (%), 5%
T= term(time), 4 and 2 (years)
I= interest, smaller amount than you principal ALWAYS

A: multiply the numbers with the formula I=prt, I= $20,000*5%*4= $4,000 (I used a calculator making my calculations on point and correct!)

B: same formula, just the term is being changed to two. I= Prt, I=20,000*5%*2= $2,000

C: for sure I'm correct because it says how much do you save by paying the loan off in 2 years instead of 4 which is simply basic subtraction of 4,000-2,000 giving you 2,000 as you final answer.
Note: 5% is equivalent to .05

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