9. Finding the Amount of Interest Paid on a Loan
Homeowners often need to know how much interest they will be paying for a home or auto loan. For example, the average US auto loan APR interest rate in 2018 is 4.21% on a 60 month loan. Imagine purchasing a $23,000 auto at this standard 4.21% annually. How much interest does the consumer have to pay at the end of the first year? To find the answer, simply convert the percentage to a percentage by moving the decimal point two spaces to the left (the equivalent of multiplying by .01). This leaves .0421. This amount is multiplied by the cost of the vehicle: 23,000 x .0421 = 968.3. So at the end of the first year, the interest paid is $968.30.
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