Your family borrows $6,000 to buy a car. The car loan has a 5% annual interest. The loan is for five years. What is the total amount your family owes for the car? *
1 point
$1500
$7500
$15000
$6150
To calculate the total amount your family owes for the car, you need to consider the principal amount (the borrowed amount) and the interest.
The principal amount borrowed is $6,000.
The annual interest rate is 5%, which means that each year, your family will have to pay 5% of the remaining loan amount as interest.
The loan term is 5 years, so your family will make payments annually for 5 years.
To calculate the total interest paid over the 5 years, use the formula:
Total Interest = Principal Amount * Interest Rate * Time
Total Interest = $6,000 * 0.05 * 5
Total Interest = $1,500
Now, to calculate the total amount owed for the car, you need to add the principal amount and the total interest:
Total Amount Owed = Principal Amount + Total Interest
Total Amount Owed = $6,000 + $1,500
Total Amount Owed = $7,500
Therefore, your family owes a total of $7,500 for the car.
The correct answer is $7,500.