to pay for an $18,500 truck, keisha made a down payment of $4300 and took out a loan for the rest. on the…
to pay for an $18,500 truck, keisha made a down payment of $4300 and took out a loan for the rest. on the loan, she paid monthly payments of $255.17 for 5 years. (a) what was the total amount keisha ended up paying for the truck (including the down payment and monthly payments)? (b) how much interest did keisha pay on the loan?
Answer
Explanation:
Step1: Calculate the loan amount
The cost of the truck is $18500$ and the down - payment is $4300$. So the loan amount $L$ is $18500 - 4300=14200$.
Step2: Calculate the total amount of monthly payments
The monthly payment is $255.17$ and the number of years is $5$. Since there are $12$ months in a year, the number of payments $n = 5\times12 = 60$. The total amount of monthly payments $M=255.17\times60 = 15310.2$.
Step3: Calculate the total amount paid for the truck
The total amount paid for the truck $A$ is the sum of the down - payment and the total amount of monthly payments. So $A=4300 + 15310.2=19610.2$.
Step4: Calculate the interest paid
The interest paid $I$ is the total amount paid for the truck minus the cost of the truck. So $I=19610.2−18500 = 1110.2$.
Answer:
(a) The total amount Keisha ended up paying for the truck is $$19610.2$. (b) The interest Keisha paid on the loan is $$1110.2$.