Question

Jenna borrows $8,000 for college at a yearly simple interest rate of 6%. She takes
15 years to pay off the loan and interest. How much interest does she pay? What is
the total amount she pays?

Answer 1

To calculate the total amount of interest Jenna pays, we first calculate the annual interest she pays.

Annual interest = $8,000 * 6% = $480

Since Jenna takes 15 years to pay off the loan, the total interest paid over 15 years is:

Total interest = $480 * 15 years = $7,200

To find the total amount Jenna pays, we add the initial loan amount to the total interest paid:

Total amount = $8,000 + $7,200 = $15,200

Therefore, Jenna pays $7,200 in interest on top of the $8,000 loan amount, for a total payment of $15,200.