Calculate the final loan amount of a $22,500 auto loan with a 3.2% simple interest rate over a 5-year term.
The formula to calculate the final loan amount with simple interest is:
Final Loan Amount = Principal + (Principal x Interest Rate x Time)
Where:
Principal = $22,500
Interest Rate = 3.2% = 0.032 (decimal form)
Time = 5 years
Plugging in these values into the formula:
Final Loan Amount = $22,500 + ($22,500 x 0.032 x 5)
= $22,500 + ($22,500 x 0.16)
= $22,500 + ($3,600)
= $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 is $26,100.