Question

Juan bought a pickup truck for $16,000. He paid $1,000 down and borrowed the rest on a one year note at 16% interest. How much will he owe at the end of one year?

Answer 1

just multiply 15000 x 1.16

Answer 2

Assuming simple interest (no compounding) and no payments during the year, he will owe $17, 400 at the end of the one year period.

Principle = $15,000+ Interest = $2,400 ($15,000 * .16)

Total = $17,400