Question
Tonya took out a loan to help pay for her house. She borrowed $60,000 for 15 years at a yearly simple interest rate of 5%. How much interest will she end up paying the bank?
A.
$45,000
B.
$450,000
C.
$9,000
D.
$450
A.
$45,000
B.
$450,000
C.
$9,000
D.
$450
Answers
GPT-4o mini
To calculate the total interest Tonya will pay on her loan, we can use the formula for simple interest:
\[
I = P \times r \times t
\]
Where:
- \(I\) is the interest,
- \(P\) is the principal amount (the initial loan amount),
- \(r\) is the annual interest rate (in decimal form),
- \(t\) is the time in years.
In this case:
- \(P = 60,000\) (the amount borrowed),
- \(r = 0.05\) (5% as a decimal),
- \(t = 15\) (the loan term in years).
Now we can plug in the values:
\[
I = 60,000 \times 0.05 \times 15
\]
Calculating this step by step:
1. Calculate \(0.05 \times 15 = 0.75\)
2. Then multiply by \(60,000\):
\[
I = 60,000 \times 0.75 = 45,000
\]
So the total interest that Tonya will end up paying the bank is **$45,000**.
The correct answer is:
**A. $45,000**
\[
I = P \times r \times t
\]
Where:
- \(I\) is the interest,
- \(P\) is the principal amount (the initial loan amount),
- \(r\) is the annual interest rate (in decimal form),
- \(t\) is the time in years.
In this case:
- \(P = 60,000\) (the amount borrowed),
- \(r = 0.05\) (5% as a decimal),
- \(t = 15\) (the loan term in years).
Now we can plug in the values:
\[
I = 60,000 \times 0.05 \times 15
\]
Calculating this step by step:
1. Calculate \(0.05 \times 15 = 0.75\)
2. Then multiply by \(60,000\):
\[
I = 60,000 \times 0.75 = 45,000
\]
So the total interest that Tonya will end up paying the bank is **$45,000**.
The correct answer is:
**A. $45,000**