Question

A family purchases a camping RV for $24,000. They borrow the money from a credit union at an 11% simple interest rate for 4 years. How much in interest will the family pay in total? Round to the nearest whole dollar.

Answer 1

To calculate the total amount of interest paid on a loan using simple interest, you can use the formula:

\[
\text{Interest} = P \times r \times t
\]

where:
- \( P \) is the principal amount (the initial amount borrowed),
- \( r \) is the annual interest rate (in decimal form),
- \( t \) is the time the money is borrowed for (in years).

For this scenario:
- The principal \( P = 24,000 \) dollars,
- The interest rate \( r = 11\% = 0.11 \),
- The time \( t = 4 \) years.

Now, we can substitute these values into the formula:

\[
\text{Interest} = 24000 \times 0.11 \times 4
\]

Calculating this step by step:

1. Calculate \( 0.11 \times 4 = 0.44 \).
2. Then multiply by \$24,000:
\[
\text{Interest} = 24000 \times 0.44 = 10560
\]

Therefore, the total interest the family will pay is \$10,560.

Rounding to the nearest whole dollar, the total interest is:

\[
\boxed{10560}
\]