suppose that you borrow $1,100 for four years at 6% toward the purchase of a car. use pmt = p(r/n)/1-(1 +…

suppose that you borrow $1,100 for four years at 6% toward the purchase of a car. use pmt = p(r/n)/1-(1 + r/n)^(-nt) to find the monthly payments and the total interest for the loan. the monthly payment is $258.34. (do not round until the final answer. then round to the nearest cent as needed.) the total interest for the loan is $ . (use the answer from part (a) to find this answer. round to the nearest cent as needed.)

suppose that you borrow $1,100 for four years at 6% toward the purchase of a car. use pmt = p(r/n)/1-(1 + r/n)^(-nt) to find the monthly payments and the total interest for the loan. the monthly payment is $258.34. (do not round until the final answer. then round to the nearest cent as needed.) the total interest for the loan is $ . (use the answer from part (a) to find this answer. round to the nearest cent as needed.)

Answer

Explanation:

Step1: Identify the values

The loan amount $P = 11000$, the annual interest rate $r=6%=0.06$, so the monthly interest rate $i=\frac{0.06}{12}=0.005$, and the number of years $t = 4$, so the number of payments $n=4\times12 = 48$. The monthly payment $PMT = 258.34$.

Step2: Calculate the total amount paid

The total amount paid over 48 months is $A=PMT\times n=258.34\times48 = 12400.32$.

Step3: Calculate the total interest

The total interest $I$ is the total amount paid minus the principal. So $I=A - P=12400.32-11000=1400.32$.

Answer:

$1400.32$