Question

How ur 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

The amount Howie need to pay back at the end of one year, including the interest is $26,000

Given:

Interest rate = 4%

Cost of car = $25,000

Time = 1 year

Amount of interest = Principal × Rate × Time

= 25,000 × 4% × 1

= 25,000 × 0.04 × 1

= $1,000

Amount to be paid = Amount of interest + Cost of car

= 1,000 + 25,000

= $26,000

Therefore, the amount Howie need to pay back at the end of one year, including the interest is $26,000

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