**Loan Interest Rate Calculation Example**---**Problem Statement:**You have agreed to pay off an $8,000 car loan with 24 monthly payments of $400 each. Use the simple interest formula to determine the interest rate that you are being charged.---**Detailed Explanation:**To determine the interest rate using the simple interest formula, follow these steps:1. **Identify the Known Values:** - **Principal (P):** $8,000 - **Total Number of Payments:** 24 - **Monthly Payment (M):** $4002. **Calculate the Total Payment Amount:** \[ \text{Total Payment} = \text{Monthly Payment} \times \text{Number of Payments} \] \[ \text{Total Payment} = \$400 \times 24 = \$9,600 \]3. **Determine the Total Interest Paid:** \[ \text{Total Interest} = \text{Total Payment} - \text{Principal} \] \[ \text{Total Interest} = \$9,600 - \$8,000 = \$1,600 \]4. **Use the Simple Interest Formula:** The simple interest formula is given by: \[ I = P \times r \times t \] where: - $I$ is the total interest paid, - $P$ is the principal amount, - $r$ is the annual interest rate, - $t$ is the time period in years.5. **Plug in the Known Values and Solve for $r$:** Convert the number of payments into years: \[ t = \frac{24}{12} = 2 \text{ years} \] Now, use the formula: \[ 1,600 = 8,000 \times r \times 2 \] \[ 1,600 = 16,000r \] \[ r = \frac{1,600}{16,000} \] \[ r = 0.10 \]6. **Convert the Rate into a Percentage:** \[ r = 0.10 \times 100 = 10\% \]

Name: **Loan Interest Rate Calculation Example**---**Problem Statement:**Yo
Uploaded: 2024-03-05T11:52:21.000Z
Channel: Bartleby
Description: **Loan Interest Rate Calculation Example**---**Problem Statement:**You have agreed to pay off an $8,000 car loan with 24 monthly payments of $400 each. Use the simple interest formula to determine the interest rate that you are being charged.---**De