the interest rate on car loans increase from 8% to 9%. although this is a rise of only 1 percentage point, you will be paying ____% more in interest on you loan. If you interest payment was $400, what would it be with the increase?
1% is 1/8 of 8%
1/8 = 12.5% ... this is the increase
400 * (1 + 1/8) = ?
To find the percentage increase in interest payment, you need to calculate the difference between the two interest rates and express it as a percentage of the original interest rate.
Step 1: Calculate the difference between the two interest rates.
Difference = New Interest Rate - Old Interest Rate
Difference = 9% - 8%
Difference = 1%
Step 2: Calculate the percentage increase.
Percentage Increase = (Difference / Old Interest Rate) * 100
Percentage Increase = (1% / 8%) * 100
Percentage Increase = 12.5%
So, the interest payment will increase by 12.5%.
To find the new interest payment, you can use the formula:
New Interest Payment = Old Interest Payment + (Percentage Increase * Old Interest Payment)
In this case, if the old interest payment was $400, we can substitute the values into the formula to find the new interest payment.
New Interest Payment = $400 + (12.5% * $400)
New Interest Payment = $400 + ($50)
New Interest Payment = $450
Therefore, with the increase, the new interest payment would be $450.