Answer:
a. Interest amount is $3,000.
b. Total cost is $23,000.
Step-by-step explanation:
a. How much interest will he pay
This can be calculated as follows:
Interest amount = Principal loan Amount * Interest rate * Number of years ........ (1)
Where;
Principal loan Amount = $20,000
Interest rate = 5%
Number of years = 3
Substituting the values into equation (1), we have:
Interest amount = $20,000 * 5% * 3 = $3,000
b. What will be the total cost that he will owe including interest?
Total cost = Principal loan Amount + Interest amount = $20,000 + $3,000 = $23,000
