You borrow $7,000 from Washington Bank to buy a new car. You agree to pay the entire amount owed, including interest, as one payment at the end of 15 months. About how much must you pay the bank at that time?
Washington Bank Car Loan
Type of car
New 5%
Used 8%
All rates are computed as simple interest.
A.) $7842.25
B.) $7437.50
C.) $7180.94
D.) $7120.30
E.) $7074.75
Washington Bank Car Loan
Type of car
New 5%
Used 8%
All rates are computed as simple interest.
A.) $7842.25
B.) $7437.50
C.) $7180.94
D.) $7120.30
E.) $7074.75
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With an annual rate of 5%, the rate for 15 months is 5% * 1.25 or 6.25%.
7000 * 0.0625 = $437.50 in interest
The total due is $7437.50 (answer B)
7000 * 0.0625 = $437.50 in interest
The total due is $7437.50 (answer B)