calculate the final loan amount of a $22,500 auto loan with a 3.2% simple interest rate over a 5-year term.
a $72,000
b $58,500
c $3,600
d $26,100
To calculate the final loan amount, we need to add the interest to the principal amount.
The formula for calculating simple interest is:
Interest = Principal x Rate x Time
Given:
Principal = $22,500
Rate = 3.2%
Time = 5 years
Interest = 22,500 x 0.032 x 5
Interest = $3,600
Final loan amount = Principal + Interest
Final loan amount = $22,500 + $3,600
Final loan amount = $26,100
Therefore, the correct answer is d) $26,100.