You want to buy a 25000 car The company is offering a 82 int

You want to buy a $25,000 car. The company is offering a 8.2% interest rate for 4 years.
Round your answer to the nearest cent as needed.

a) What will your monthly payments be? $

b) How much interest will you pay over the entire loan period? $

Solution

Consider simple interest annual

Principle amount is = $25000

Rate = 8.2%

Time = 4 yr

(a) Interest rate is charged annual

I = P*R*T/100

I = (25000*4*8.2)/100

I = $ 8200

Total amount = $(25000 + 8200)

Monthly payment = $ 33200/48

= $ 691.66

(b)  Interest will you pay over the entire loan period = $ 8200

Answer