Asked by Michael McGuire on Apr 26, 2024
Verified
The total interest on a 5 year 5.2% loan with a principal of $10,000 is 10,000 0.052 5 = $2,600.
Principal
The balance, or amount of money, in an account, or amount borrowed.
Interest
The cost of borrowing money or the payment received for lending money, usually expressed as a percentage of the principal.
- Understand and apply basic true/false principles regarding loans, credit cards, and consumer protections.
Verified Answer
DK
Dennell KrebsApr 27, 2024
Final Answer :
False
Explanation :
The formula provided seems to be an attempt to calculate simple interest, which is Principal * Rate * Time. The correct calculation for a 5-year loan at 5.2% interest on a principal of $10,000 should be $10,000 * 0.052 * 5 = $2,600, which is correct, but the formula notation in the question is unclear and incorrectly formatted.
Learning Objectives
- Understand and apply basic true/false principles regarding loans, credit cards, and consumer protections.