Question

jessy took out loan of $16,500 over 5 years at 4.2% interest to purchase a new car. how much will she pay in interest on the loan. A)$693 B)$3,465 C)$13,035 D)$34,650

Answer 1

help needed!!!!

Answer 2

Well first, do you know the formula for percent? @yourgrandpa

Answer 3

yes

Answer 4

Ok cool, since we have the percent and the x amount (16,500) we can use this.

Y = P% * X

Answer 5

ok

Answer 6

i thought that we did 16,500 ÷ 5 • 4.2 = ? Am i right ?

Answer 7

Or am i wrong?

Answer 8

Ok, the first step would be converting the percent to a decimal.

Answer 9

What would 4.2 divided by 100 =?

Answer 10

0.042

Answer 11

Correct. Now that we have it as a decimal we can use that formula I mentioned earlier.

Y = P% * X

Answer 12

ok

Answer 13

It would look like this:

Answer 14

uhh that was ugly LOL, but yes, 0.042 x 16500.

What does this equal?

Answer 15

A)$693??

Answer 16

thanks (: alot

Answer 17

So this is a simple interest calculation

Answer 18

The formula that we would have to use is

A = P(1 + rt)

A would be the total amount paid including the interest
P is our starting off amount which is 16,500 in this case

r is the interest rate or 4.2%
t is time which is 5 years

Answer 19

You will find that A is not the correct answer

Answer 20

ok then what is it??? now I'm confused

Answer 21

We're dealing with interest and in this case it's about simple interest

Answer 22

ok

Answer 23

You have almost all of the numbers, we need to solve for A before we can get your final answer.

A = P(1 + rt)

We said P = 16500
r = 0.042
(that's 4.2% as a decimal like you calculated earlier)
t = 5

So what is

A = 16,500 * (1 + (0.042*5))

so first, what is 0.042*5 = ?

Answer 24

0.210

Answer 25

Good., now we have
A = 16,500 * (1 + 0.21)

add 1 to it

1 + 0.21 = ?

Answer 26

1.21

Answer 27

OH, I see now. What you and I did @yourgrandpa, was only to find the interest value. I forgot to multiply the initial interest times the amount of years. So we can start from where we were at (693) and multiply it by 5. Isn't this correct? @AZ

Answer 28

ohhh ok

Answer 29

Well yes, but this will only work for simple interest questions. If it's a compound interest problem, that wouldn't work.

Answer 30

ok

Answer 31

\(\color{#0cbb34}{\text{Originally Posted by}}\) @AZ
Good., now we have
A = 16,500 * (1 + 0.21)

add 1 to it

1 + 0.21 = ?
\(\color{#0cbb34}{\text{End of Quote}}\)
1.21

Answer 32

multiply that with 16500

Answer 33

19965.00

Answer 34

So that's the TOTAL amount you will pay in 5 years with interest.

So to calculate how much interest you pay, you have to just subtract the initial amount from it

19,965 - 16,500 = ?

Answer 35

\(\color{#0cbb34}{\text{Originally Posted by}}\) @AZ
So that's the TOTAL amount you will pay in 5 years with interest.

So to calculate how much interest you pay, you have to just subtract the initial amount from it

19,965 - 16,500 = ?
\(\color{#0cbb34}{\text{End of Quote}}\)
3465

Answer 36

\(\color{#0cbb34}{\text{Originally Posted by}}\) @yourgrandpa
3465
\(\color{#0cbb34}{\text{End of Quote}}\)

And that's your final answer!

Answer 37

Ohh, so now I see how you got your answer @AZ thanks for the heads up earlier.

Answer 38

\(\color{#0cbb34}{\text{Originally Posted by}}\) @AZ
\(\color{#0cbb34}{\text{Originally Posted by}}\) @yourgrandpa
3465
\(\color{#0cbb34}{\text{End of Quote}}\)

And that's your final answer!
\(\color{#0cbb34}{\text{End of Quote}}\)
thanks(:

Answer 39

My pleasure!