Question

Bob pays 7% interest on his $40,000 college loan and 9% interest on his $19,000 car loan. What average interest rate doeshe pay on the total $59,000 he owes? Round your answer to the nearest tenth of a percent.

Answer 1

SOLUTION:

Step 1:

In this question, we are told that:

Bob pays 7% interest on his $40,000 college loan and 9% interest on his $19,000 car loan.

We are told to calculate the average interest rate does he pay on the total $59,000 he owes.

Step 2:

For us to calculate the average interest rate does he pay on the total $59,000 he owes:

We need to do the following:

$\frac{(\frac{7}{100}\text{ x 40,000 ) + ( }\frac{9}{100}\text{ x 19,000)}}{59,000}\text{ x }\frac{100}{1}$

=

$\frac{2800\text{ + 1710}}{59000}\text{ x }\frac{100}{1}$

=

$\frac{4510}{59000}\text{ x }\frac{100}{1}$

=

$\begin{gathered} 0.0764\text{ x 100} \\ =\text{ 7.64 \%} \\ \approx\text{ 7. 6 \% ( to the nearest tenth )} \end{gathered}$

CONCLUSION:

The final answer is 7. 6% ( to the nearest tenth)