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Home Q & A Board Science-Related Homework Help Mathematics
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ikrabbe ikrabbe
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6 years ago
Sam got a job at the Brick. He immediately finances a car paying $500 every month for 3 years. The interest is 2.25% compounded monthly. How much is the interest cost of the financing?
A) $17 390.19
B) $408.04
C) $603.37
D) $9284.81
E) $609.81
Textbook 
Contemporary Business Mathematics with Canadian Applications

Contemporary Business Mathematics with Canadian Applications


Edition: 11th
Authors:
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AxyAxy
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Anonymous
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#2
A year ago
Effective monthly interest rate =(1+2.25%/2)^(1/6)-1 =0.18662709%
Number of months =3*12 =36
PV of all payments =PMT*((1-(1+r)^-n)/r) =500*((1-(1+0.18662709%)^-36)/0.18662709%) =17392.96

Interest Charge =36*500-17392.96 =607.04
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