Answer:
a) $300
b) $75
Step-by-step explanation:
Cost of the Car = $15,000
a) Rate of interest received on savings(r) = 2%
Amount in savings account(p) =$3000
Time period(t) = 5 years
Simple interest = ![\frac{P \times R \times t}{100}](https://tex.z-dn.net/?f=%5Cfrac%7BP%20%5Ctimes%20R%20%5Ctimes%20t%7D%7B100%7D)
= ![\frac{3000 \times 2 \times 5}{100}](https://tex.z-dn.net/?f=%5Cfrac%7B3000%20%5Ctimes%202%20%5Ctimes%205%7D%7B100%7D)
= $300
Interest received on savings account = $300
b) Rate of interest on loan = 0.5%
IF P= 15000
Interest = ![\frac{15000 \times 0.5 \times 5}{100}](https://tex.z-dn.net/?f=%5Cfrac%7B15000%20%5Ctimes%200.5%20%5Ctimes%205%7D%7B100%7D)
= $375
If P= $12000
Interest = ![\frac{12000 \times 0.5 \times 5}{100}](https://tex.z-dn.net/?f=%5Cfrac%7B12000%20%5Ctimes%200.5%20%5Ctimes%205%7D%7B100%7D)
= $300
Difference between the interest = $75
c) Taking loan of the whole amount that is of $15,000 is more reasonable because though the interest is more but Troy will receive interest($300) from his savings account as well. But if he withdraws $3000 from savings and takes the loan for the rest of the amount, he would have no earnings.