Dana is purchasing a new car that costs $24,650. The bank is charging 4% simple interest for 6 years to finance the car. Using I = PRT, where I represents the amount of interest, P equals the amount financed, R represents the interest rate as a decimal, and T represents the number of years the car is financed, how much interest will Dana pay?
First, we need to convert the interest rate from a percentage to a decimal. 4% as a decimal is 0.04.
The equation for calculating simple interest is: I = PRT.
The amount financed, P, is $24,650.
The interest rate, R, is 0.04.
The number of years, T, is 6.
Substituting these values into the equation: I = $24,650 * 0.04 * 6.
Do the math to find: I = $5,916.