to purchase $12,200 worth of restaurant equipment for his business, hans made a down - payment of $1400 and…

to purchase $12,200 worth of restaurant equipment for his business, hans made a down - payment of $1400 and took out a business loan for the rest. after 2 years of paying monthly payments of $478.67, he finally paid off the loan. (a) what was the total amount hans ended up paying for the equipment (including the down - payment and monthly payments)? (b) how much interest did hans pay on the loan?

to purchase $12,200 worth of restaurant equipment for his business, hans made a down - payment of $1400 and took out a business loan for the rest. after 2 years of paying monthly payments of $478.67, he finally paid off the loan. (a) what was the total amount hans ended up paying for the equipment (including the down - payment and monthly payments)? (b) how much interest did hans pay on the loan?

Answer

Explanation:

Step1: Calculate total monthly payments

Hans made monthly payments of $478.67 for 2 years. Since there are 12 months in a year, the number of months $n = 2\times12=24$. The total of monthly - payments is $478.67\times24$. $478.67\times24 = 11488.08$

Step2: Calculate total amount paid

He made a down - payment of $1400$. The total amount paid (including down - payment and monthly payments) is the sum of the down - payment and the total of monthly payments. Let $A$ be the total amount paid. Then $A=1400 + 11488.08$. $A=12888.08$

Step3: Calculate interest paid

The cost of the equipment is $12200$. The interest paid $I$ is the total amount paid minus the cost of the equipment. So $I = 12888.08-12200$. $I = 688.08$

Answer:

(a) $12888.08 (b) $688.08