Me plyou purchase a car using a $20,000 loan with a 5% simple interest rate. (a) how much interest do you pay on your loan if you pay off the loan in 4 years? show your work. (b) how much interest do you pay on your loan if you pay off the loan in 2 years? show your work. (c) how much interest do you save by paying the loan off in 2 years instead of 4? show your work.

A.You want to calculate the interest on $20000 at 5% interest per year after 4 year(s).

The formula we'll use for this is the simple interest formula, or:

            I=P x r x t

Where:

P is the principal amount, $20000.00.

r is the interest rate, 5% per year, or in decimal form, 5/100=0.05.

t is the time involved, 4year(s) time periods.

So, t is 4year time periods.

To find the simple interest, we multiply 20000 × 0.05 × 4 to get that:

The interest is: $4000.00

B.You want to calculate the interest on $20000 at 5% interest per year after 2 year(s).

The formula we'll use for this is the simple interest formula, or:

Where:

               I=P x r x t

P is the principal amount, $20000.00.

r is the interest rate, 5% per year, or in decimal form, 5/100=0.05.

t is the time involved, 2year(s) time periods.

So, t is 2year time periods.

To find the simple interest, we multiply 20000 × 0.05 × 2 to get that:

The interest is: $2000.00

C.you save $2000.00 for paying a 2 year loan instead of a 4 year loan

Hope it help Sorry its long : )