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 an interest will the family pay in total round to the nearest whole dollar

Answer 1

To calculate the total 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 amount borrowed),
- \( r \) is the annual interest rate (in decimal form),
- \( t \) is the time in years.

In this case:
- \( P = 24,000 \)
- \( r = 11\% = 0.11 \)
- \( t = 4 \)

Now let's plug the values into the formula:

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

Calculating step by step:

1. Calculate \( 24000 \times 0.11 \):
\[
24000 \times 0.11 = 2640
\]

2. Now multiply that result by 4:
\[
2640 \times 4 = 10560
\]

So the total interest the family will pay in 4 years is **$10,560**.

Rounding to the nearest whole dollar, the interest is **$10,560**.