Debbie needs to know how much she will pay on her car loan. Using the simple interest formula, how much will she pay with a principal balance of $12,000, an interest rate of 5 percent, and a 60-month loan?

how much will she pay with a principal balance of $12,000, an interest rate of 5 percent, and a 60-month loan? Total amount 13.859. Interest 1.859 Principal 12.000

Explanation

Due Interest Principal Balance

12.000

year 1 2.772 600 2.172 9.828

year 2 2.772 491 2.280 7.548

year 3 2.772 377 2.394 5.154

year 4 2.772 258 2.514 2.640

year 5 2.772 132 2.640 0

13.859 1.859 12.000