Calculate the final loan amount of a $22,500 auto loan with a 3.2% simple interest rate over a 5-year term.
$26,100
$58,500
$3,600
$72,000
To calculate the final loan amount, we need to find the total amount paid, which includes the principal amount (the loan) and the interest.
The formula to calculate the total amount paid is: Total Amount Paid = Principal + Interest
The interest amount can be calculated using the formula: Interest = Principal * Rate * Time
Given:
Principal (loan amount) = $22,500
Rate = 3.2% = 0.032 (in decimal form)
Time = 5 years
Interest = $22,500 * 0.032 * 5 = $3,600
Total Amount Paid = $22,500 + $3,600 = $26,100
Therefore, the final loan amount is $26,100.