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 your loan.
If your interest payment was $400, what would it be with the increase?
it has increased by 1/8 = 12.5%
please explain to me how you got the answer.
what is the increase in $400.00
To calculate the increase in interest payment, we need to find out the percentage increase in interest rate and then apply that increase to the given interest payment.
Step 1: Calculate the percentage increase in interest rate:
Percentage increase = (New interest rate - Old interest rate) / Old interest rate
In this case, the old interest rate is 8% and the new interest rate is 9%.
Percentage increase = (9 - 8) / 8 = 1/8 = 0.125 = 12.5%
Step 2: Apply the increase in interest rate to the given interest payment:
Increase in interest payment = Percentage increase × Old interest payment
Increase in interest payment = 0.125 × $400 = $50
So, with the increase in interest rate, you would be paying an additional $50 in interest on your loan.
Therefore, the new interest payment would be $400 + $50 = $450.