Peter buys a car worth $21,800 by putting a downpayment of 10% and taking a loan...
Peter buys a car worth $21,800 by putting a downpayment of 10% and taking a loan for the balance amount. The loan carries an interest rate of 3.99% over a period of 5 years and needs to be paid on a monthly basis. What is the total interest Peter is expected to pay over the life of the loan?
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approximately $2,236 |
|
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approximately $2,091 |
|
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approximately $2,067 |
|
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approximately $2,055 |
Please show work
Thank you
Homework Answers
Loan Amount = 0.90(21,800) = $19,620
Calculating Monthly Payment,
Using TVM Calculation,
PMT = [PV = 19,620, FV = 0, N = 60, I = 0.0399/12]
PMT = $361.24
Total Interest Paid = 60(361.24) - 19,620
Total Interest Paid = $2,055
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