Josh is buying a RV and is taking out a loan in the amount of $20,000. His choices for the loan are a 5-year loan at 6.00% annual simple interest and a 6-year loan at 7.00% annual simple interest. What is the difference in the amount of interest Josh would have to pay for these two loans?
For the 5-year loan, Josh would have to pay $20,000 * 0.06 = $<<20000*0.06=1200>>1200 in interest per year.
So the total interest for the 5-year loan is $1200 * 5 = $<<1200*5=6000>>6000.
For the 6-year loan, Josh would have to pay $20,000 * 0.07 = $<<20000*0.07=1400>>1400 in interest per year.
So the total interest for the 6-year loan is $1400 * 6 = $<<1400*6=8400>>8400.
Thus, the difference in the amount of interest Josh would have to pay for these two loans is $8400 - $6000 = $<<8400-6000=2400>>2400. Answer: \boxed{2400}.
To find the difference in the amount of interest, we need to calculate the total interest paid for both loans. Here's how to do it step by step:
Step 1: Calculate the interest for the 5-year loan:
Interest = Principal x Rate x Time
Principal = $20,000
Rate = 6.00% = 0.06 (because it's in decimal form)
Time = 5 years
Interest for the 5-year loan = $20,000 x 0.06 x 5 = $6,000
Step 2: Calculate the interest for the 6-year loan:
Principal = $20,000
Rate = 7.00% = 0.07 (because it's in decimal form)
Time = 6 years
Interest for the 6-year loan = $20,000 x 0.07 x 6 = $8,400
Step 3: Find the difference in interest:
Difference in interest = Interest for the 6-year loan - Interest for the 5-year loan
Difference in interest = $8,400 - $6,000 = $2,400
Therefore, the difference in the amount of interest Josh would have to pay for these two loans is $2,400.
To find out the difference in the amount of interest Josh would have to pay for these two loans, we need to calculate the interest amount for each loan option and then find the difference between them.
Let's start with the first loan, which is a 5-year loan at 6.00% annual simple interest. The formula to calculate simple interest is:
Interest = Principal × Rate × Time
For this loan, the principal (amount borrowed) is $20,000, the rate is 6.00%, and the time is 5 years. Plugging these values into the formula:
Interest = $20,000 × 6.00% × 5 = $6,000
So, the interest amount for the 5-year loan is $6,000.
Now, let's calculate the interest amount for the second loan, which is a 6-year loan at 7.00% annual simple interest. Using the same formula:
Interest = Principal × Rate × Time
For this loan, again, the principal is $20,000, the rate is 7.00%, and the time is 6 years. Plugging these values into the formula:
Interest = $20,000 × 7.00% × 6 = $8,400
So, the interest amount for the 6-year loan is $8,400.
Finally, to find the difference in the amount of interest between these two loans, we subtract the interest for the 5-year loan from the interest for the 6-year loan:
Difference = Interest(6-year loan) - Interest(5-year loan)
= $8,400 - $6,000
= $2,400
Therefore, the difference in the amount of interest Josh would have to pay for these two loans is $2,400.