Alisha has a $15,000 car loan with a 6 percent interest rate that is compounded annually. How much will she have paid at the end of the five-year loan term?total amount = P (1 + i)t$19,500.25$15,900.50$20,073.50
Accepted Solution
A:
Use the attached formula. r = 6 / 1,200 = .005 Principal = 15,000 n = number of payments = 5 yrs * 12 months = 60 TOTAL Loan Cost = (.005 * 15,000 * 60) / 1 -(1.005^-60) TOTAL Loan Cost = 4,500 / (1 -
0.7413721962) TOTAL Loan Cost = 4,500 /
0.2586278038
TOTAL Loan Cost =
17,399.52 Although it is NOT one of the choices, I think my answer of 17,399.52 is correct. Using a monthly loan payment calculator, I get 289.99 for the monthly payment. 290*60 months = 17,400 so that seems correct. I do not think that formula you posted is correct. (Compare it to the one I posted.)