Respuesta :
1rst prt-
20,000 • .05 • 4 =$ 4,000 interest Grand total of 2,400
2nd prt-
20,000 • .05 • 2 =$ 2,000
20,000- 2,000 = $18,000 -how much you will save
20,000 • .05 • 4 =$ 4,000 interest Grand total of 2,400
2nd prt-
20,000 • .05 • 2 =$ 2,000
20,000- 2,000 = $18,000 -how much you will save
Answer: Interest saved by paying the loan after two years instead paying it after 4 years is $2,000.
Step-by-step explanation:
Simple interest, when time taken of 4 years
Principal amount borrowed from bank as a loan, P = $ 20,000
Interest Rate ,R = 5%
Time taken to repay the loan , T = 4 years
[tex]\text{Simple interest }=\frac{P\times R\times T}{100}=\frac{\$20,000\times 5\times 4}{100}=\$4,000[/tex]
Simple interest ,when time taken of 2 years
Principal amount borrowed from bank as a loan, P = $ 20,000
Interest Rate ,R = 5%
Time taken to repay the loan = 2 years
[tex]\text{Simple interest }=\frac{P\times R\times T}{100}=\frac{\$20,000\times 5\times 2}{100}=\$2,000[/tex]
Interest saved by paying the loan off sooner that is in 2 years:
=Simple interest paid in 4 years - Simple interest paid in 2 years.
= $4,000 - $2,000 = $2,000
