Question

Josh is buying a RV and is taking out a loan in the amount of $20,000. His choices for the loan are a 5-year loan at 6.00% annual simple interest and a 6-year loan at 7.00% annual simple interest. What is the difference in the amount of interest Josh would have to pay for these two loans?

Answer 1

For the 5-year loan, Josh would have to pay $20,000 * 0.06 = $<<20000*0.06=1200>>1200 in interest per year.
So the total interest for the 5-year loan is $1200 * 5 = $<<1200*5=6000>>6000.
For the 6-year loan, Josh would have to pay $20,000 * 0.07 = $<<20000*0.07=1400>>1400 in interest per year.
So the total interest for the 6-year loan is $1400 * 6 = $<<1400*6=8400>>8400.
Thus, the difference in the amount of interest Josh would have to pay for these two loans is $8400 - $6000 = $<<8400-6000=2400>>2400. Answer: \boxed{2400}.