Calculate the final loan amount of 22,500 auto loan with a 3.2% simple interest rate over a 5 year term
To calculate the final loan amount, we need to consider both the principal amount and the interest accrued over the 5-year term.
The formula for simple interest is:
Interest = Principal × Rate × Time
Let's plug in the given values:
Principal (loan amount) = $22,500
Rate (interest rate) = 3.2% = 0.032 (in decimal form)
Time (loan term in years) = 5
Interest = $22,500 × 0.032 × 5
Interest = $3,600
The interest accrued over the 5-year term is $3,600.
To find the final loan amount, we add the interest to the principal:
Final Loan Amount = Principal + Interest
Final Loan Amount = $22,500 + $3,600
Final Loan Amount = $26,100
Therefore, the final loan amount of a $22,500 auto loan with a 3.2% simple interest rate over a 5-year term would be $26,100.